What You Need To Know About Taxes And The Budget Proposals That Might Swing The Vote This Year

A Comparison of Budgets Proposed by Mitt Romney and President Obama

Many people like playing around with budget estimates. This is mainly because budgets force people to set priorities and run the numbers. The annual federal budget is the only time the government is ever sincere with taxpayers.

About 40 percent of government spending goes to Social Security, Medicaid and Medicare. Military spending accounted for 23.8 percent of government spending. Generally, nearly two thirds of 2012 taxes went to an insurance conglomerate and boots on the ground at home and overseas.

The President’s proposed 2013 budget carries similar figures as those found in the 2012 buget. It is important to analyze what the two major contenders for the 2012 presidential race have to say about government spending and revenue collection.

A quick look into the historical budgets reveals that revenue collection has been slow. Some people blame this on Bush tax cuts that were extended to 2010 by the Obama administration. The recent recession that hit most countries in the world is also to blame.

To be fair, to the president, his figures need to add up because he bears the burden of governance. His figures need to unite his party’s congressional wing.

On the other hand, Mitt Romney is trying to outshine his competitors for the Republican ticket, Rick Santorum and Newt Gingrich. He is making promises to motivate party faithful and mollify conservatives. So obviously, his figures will be better than those of the incumbent.

While Obama’s plan would increase revenues to around 19.2 percent of GDP, Romney’s plan would extend Bush tax cuts over the next ten years, collecting 17.9 percent of gross domestic production as revenue.

The presidential race aside, it is important for every taxpayer to run the numbers and see which budget proposal is better.

A Candidate’s Offshore Tax Havens

Stories of offshore tax havens belonging to Mitt Romney have been causing a stir in the news media. Several sources such as Reuters and the Washington Post have unearthed troublesome material in the candidate’s most recent tax returns. Reuters journalist Sam Youngman reports that Romney may have sheltered offshore bank accounts as a result of his business dealings with Bain Capital. Youngman’s published findings do imply this information, though his actual wording is somewhat vague.

Romney has amassed a large fortune due to investments in several dozen funds with ties to this private equity firm that he helped start over 15 years ago. A number of Bain funds have connections to offshore accounts. This firm also has a record of generating tax breaks for only the most wealthy Americans.

Evidence in tax returns could reveal that Bain and Romney have avoided paying 2012 taxes with these offshore account tactics. A detailed analysis of his securities filings show that the candidate has Bain funds stashed in accounts located in far-flung regions, such as Bermuda, the Cayman Islands, Hong Kong, and Ireland.

Much of this information is true and verifiable, though it does not solidly point to tax evasion or avoidance. This type of corporation is only responsible for tax payment in cases of repatriation. These factors are often considered a grey area in terms of this implied information in the media about Romney’s supposed offshore financial holdings. Some of these early reports also describe conflicting roles of the Cayman Islands as locations for some of these holdings