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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsGingrich Used Gimmick To Avoid Paying Taxes On Millions In Income
Former House Speaker Newt Gingrich (R) caused a stir during last weeks Republican presidential primary debate when he released his 2010 tax return and revealed that he had paid a 31.5 percent tax rate on $3.14 million in income. The release came amid widespread calls for Gingrichs fellow candidate, former Massachusetts Gov. Mitt Romney (R), to release his own tax returns, after Romney admitted his tax rate was about 15 percent.
But further scrutiny of Gingrichs own returns from tax experts has revealed that his tax rate should have been even higher. Thats because, according to Forbes, Gingrich dodged tens of thousands of dollars in Medicare payroll taxes by classifying most of his income from two companies he owns as profits and dividends, therefore avoiding the payroll tax a technique the IRS has consistently and successfully attacked in the past. Newt and Callista Gingrich classified only $444,327 of their income from Gingrich Holdings and Gingrich Productions as ordinary income. Meanwhile, the other $2.4 million earned was classified as profits or dividends, meaning it was not subject to payroll taxes.
According to tax experts interviewed by Forbes, that means Gingrich is dodging taxes he likely should be paying:
http://www.forbes.com/sites/janetnovack/2012/01/22/gingrich-used-payroll-tax-ploy-often-attacked-by-irs/
It appears that he is not paying his fair share of Medicare tax, Robert E. McKenzie, a partner in the Chicago law firm of Arnstein & Lehr LLP concluded, in an email to Forbes, after reviewing Gingrichs 2010 tax return. McKenzie, a past chairman of the Employment Tax Committee of the American Bar Association Tax Section and a member of the IRS Advisory Council, added: There are a multitude of cases where the IRS has successfully challenged the improper tax strategy of this candidate and his accountants. Service businesses are only allowed to distribute a fair return on investment from an S corp. as profits exempt from Medicare taxes. The remainder of profits must be paid as salary subject to a 2.9% Medicare tax levy.
http://thinkprogress.org/economy/2012/01/23/409602/gingrich-tax-dodging/
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(52,243 posts)Jackpine Radical
(45,274 posts)Haven't you ever wished that the whole truth would come out about these swine in such a way as to grab the attention of the Doltentariat?
Well . . .