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The guiltless millionaire - A Blog from Freemont Group

Freemont Group
05 February, 2012

America´s  ‘Patriotic Millionaires for fiscal strength’ manage to keep the attention of the mainstream media. They are millionaires after all. The issue of taxing the rich was highlighted last week when United States presidential candidate Mitt Romney finally released his tax records after much public pressure. When it was revealed that Romney´s effective tax rate on his $20,8 million annual income is only 13,9% outrage ensued. America has long maintained a relatively low tax rate on carried interest of 15%. Since Romney´s income consists mostly of interest, his effective tax rate (including deductions) is lower than that of the average American. While Romney defended himself by saying that he only pays what he is legally required to, this statement is not completely accurate. In 2007 a bill was introduced to increase the tax rate on carried interest to the corporate level of 35%. Mitt Romney´s former company Bain Capital, in which he still holds shares, actively lobbied against this bill. It seems keeping your taxes low is an easy job when you have enough money to write the law.

While some millionaires lobby for lower taxes, on the other side of the spectrum we find the ‘Patriotic Millionaires for Fiscal Strength’ who lobby for higher taxes.  Their blatant hypocrisy was highlighted when a journalist from the daily caller asked several of these altruistic millionaires to voluntarily donate to the Treasury. For years the United States Treasury has had an office and an account number to donate to and help pay off the national debt.

Apparently a voluntary contribution won´t do, nor does donating it to charity like Bill Gates does. These millionaires want the government to force them to pay higher taxes. Only by being punished for their wealth can they feel absolved from guilt. Despite Mitt Romney maintaining his wealth through backroom deals, we can agree with him on one thing: he does not need to apologize for his success.


About the Author

Freemont Group

Freemont Group is a comprehensive provider of fiduciary services, including corporate formation and administration, trust, fund formation, legal-and tax services. Contact: info@freemontgroup.com


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