Most of us think that people who have made a ton of money by various means then simply invest it and live off the resulting income. But what form does this investment income take? If you are an average person, you tend to think of investment income as the interest on certificates of deposit or savings and money market accounts, which are taxed at the same rate as ordinary income. More sophisticated investors get their investment income in the form of [Read more…]

One of the reasons why Mitt Romney has always been the favorite to win the Republican nomination is because he is the oligarchy’s choice, with close ties to all the major banks. He has obtained [Read more…]

A quite extraordinary thing has happened in American, and even world, politics. It used to be the case that great wealth and income inequality were topics that were not mentioned in mainstream discourse and to suggest that this was not healthy for a democracy was to be accused of being envious or creating class warfare or attacking capitalism itself.

But how things have changed. Now the vast disparity in income and wealth between the top 1% and the remaining 99% is front and center. The gulf between the former and the latter is a major topic of discussion in [Read more…]

The candidate for US Senate from Massachusetts seems to have passion and a willingness to take on the big financial interests that are working against the poor and the middle class. While the US Senate has become a largely ineffective body, she may still be able to use it as a platform to articulate a point of view that is currently with little voice in Congress.

Of course, I have been disillusioned before by many candidates who [Read more…]

Large gifts given to others are taxable. There are some loopholes. For example, a parent can give up to $10,000 per year to a child without incurring gift taxes. But if you have income that can be classified as ‘carried interest’, then you can give huge gifts to your children without incurring any tax whatsoever.

Romney’s tax returns reveal that he gave $100 million to his children using this loophole, that is available only to the wealthy whose income is from investments.

Thanks to reader Henry, I learned about this article by James Surowiecki in the New Yorker that explains how private equity firms like Bain Capital (where Romney made his fortune) make their money. It is not pretty.

Private equity firms use a small amount of their own money and [Read more…]

Mitt Romney is not a good public speaker. I find it painful to listen to him. Even a short clip of his speeches reveals someone who seems uncomfortable in that role because he lacks the ability to make his points clearly. What has got him so far is money and preparation plus the backing of the party establishment, the media, and the oligarchy, coupled with his willingness to say anything to pander to his audience. This is what makes so puzzling his repeated stumbles on the question of his own taxes, a topic that he must surely have known was coming. His performance on this issue is weirdly awkward for someone who prides himself on his careful preparation.

There seems to be increasing intrusiveness in the political process resulting in the current expectation that candidates for major office [Read more…]