Gingrich Beats GOP Foes to Tax Return Punch

Jan 20, 2012, 9:47 am EDT
Gingrich Beats GOP Foes to Tax Return Punch

Former House Speaker Newt Gingrich has put additional pressure on former Massachusetts Gov. Mitt Romney and the other remaining GOP candidates by releasing his 2010 federal tax return on his website.

According to the form, Gingrich filed a joint return with his wife Calista, and the two paid a 31.45% tax rate on their income. They paid $994,708 on $3,162,424 in total income. Most of Gingrich’s income comes from businesses, the largest of which is Gingrich Productions, a multimedia production company that creates documentaries, books, newsletters, audio books, and photo essays, as well as handles Newt and Calista’s appearances on television, radio, and for speeches. At least some of Gingrich’s income was likely to have been taxed at the ordinary income tax rate of 35%.

Gingrich also has promised to release his 2011 tax return when it is completed in April, and thus far seems to be well on top of the tax return game. It might be a political ploy, but it is still refreshing to see a candidate implying, however indirectly it might be, that paying a fair share of taxes is a good thing, and not something to avoid. Read 

Topsy-Turvy South Carolina Primary Enters Final Stretch

Jan 20, 2012, 9:06 am EDT

On Monday of this week it looked as though Mitt Romney was cruising to victory in the Republican primaries. He had won in Iowa and New Hampshire and had a sizable lead in the polls in South Carolina. What a difference a day makes. Over the course of Thursday morning, Rick Perry dropped out of the race and endorsed Newt Gingrich and Iowa announced that, upon recount, Rick Santorum, not Romney, actually won the caucus. Later in the day, a slew of polls were released that showed Gingrich leading Romney in South Carolina, building on what was considered a strong debate performance two days ago.

Gingrich entered the final debate with a considerable amount of momentum and capitalized on it. The Romney campaign suddenly seems to be wobbling. The former House Speaker is now poised to win the South Carolina primary on Saturday.

What are the takeaways from tonight’s debate and what does it mean for the race going forward? Read 

More National Debt Storm Clouds Roll In

Jan 19, 2012, 4:23 pm EDT

Despite the overall improvement in the market, I’m still having a hard time understanding how the economy can foster genuine, sustained growth. Consider the number of ill winds kicking up:

First, there’s the multibillion-dollar cloud of belated “robo-signed” foreclosures that are about to hit our fragile real estate system. Then, you’ve got the donnybrook Congressional environment taking up arms again in March when the stop-gap payroll tax cuts expire. There’s also the “gloves off” Presidential campaign that is quickly picking up speed, which you can count on to essentially stall all vital and necessary legislation until 2013. Finally, there’s our Federal Reserve, which has few to no arrows left in its quiver to address another economic downturn.

So let’s enjoy this period of optimism while we can. The soaring national debt has reached a symbolic tipping point, and it won’t be long before the market must confront this reality. Read 

Romney Tithed Stock to Church to Receive Tax Deductions

Jan 19, 2012, 12:13 pm EDT

A Reuters article recently shined some light on the way that some of the very rich, like former Massachusetts Gov. Mitt Romney, handle their obligations to God and government.

More specifically, it showed how Romney tithed to the Mormon church and received large tax deductions at the same time. By donating stock he had obtained through his dealings at Bain Capital, he not only avoided paying capital gains taxes on any stock that had appreciated in value — which would have been necessary if he had sold the stock and either pocketed or donated the money from the sale –  but he was allowed to deduct some or all of the value of the donated stock from his taxable income. Typically, the church would sell the stock immediately after it was donated and pay no tax on the sale.

While Romney should be commended for sticking to the tenets of his faith, even as it potentially cost him millions of dollars in future profits, the tax loophole that stock donations appears to exploit is a curious one. Stock tithing seems to allow both Romney and the Mormon church from paying taxes that other stockholders might have to pay. Read 

Perry Drops Out of Race for GOP Nomination

Jan 19, 2012, 10:59 am EDT

Texas Gov. Rick Perry has decided to end his campaign for the Republican presidential nomination, according to The Wall Street Journal. In a press conference today, Perry endorsed former House Speaker Newt Gingrich.

Perry leaving the campaign and endorsing Gingrich could not come at a worse time for former Massachusetts governor and GOP frontrunner Mitt Romney. Recent Politico polls show that Gingrich has the big “mo” and has risen from nearly dead in the water to just 7 percentage points behind Romney. Romney currently leads with 37%, followed by Gingrich with 30%. Ron Paul and Rick Santorum are some ways off with 11% and 10% respectively, while Perry had just 4% of the vote. The remaining 8% of voters were undecided.

Perry’s endorsement will certainly benefit Gingrich and boost his conservative bona fides, but even assuming every Perry voter flocks to Gingrich, it won’t be enough to win the South Carolina primary. Gingrich will need to find a way to either convince those undecided voters to vote for him, or take voters from the remaining candidates. Still, there is a very good chance that what might have been a crowning moment for Romney will instead prolong the GOP primary season. Read 

Is Attacking Private Equity Good for the GOP?

Jan 19, 2012, 10:24 am EDT

There’s a new villain in the Republican race for the party’s presidential nomination, and its name is business. More specifically, the villain has become GOP frontrunner Mitt Romney and his record at private equity firm Bain Capital, a company the former Massachusetts governor started in 1984. Since his decisive victory in the New Hampshire primary, Gov. Romney has come under attack from rivals such as former Texas Gov. Rick Perry (who, according to the Wall Street Journal, has dropped out of the race today), and former Speaker of the House Newt Gingrich

On the campaign trail in South Carolina last week, Perry accused Romney’s Bain Capital of practicing “vulture capitalism,” saying that it destroyed people’s lives and was a “get-rich-quick scheme” designed to make a quick profit. Gingrich took his anti-Romney, anti-Bain Capital attacks to a whole other level. A Gingrich-supporting “Super PAC” went Hollywood on Romney, producing a slick 28-minute video that portrayed Romney as a ruthless Gordon Gekko-like corporate raider that swooped down and preyed on companies, fired all of their employees, and then parceled off the carcass for a quick buck.

This anti-business line of attack from Perry and Gingrich is a risky strategy, as it sounds more like rhetoric from an Occupy Wall Street rally than it does talking points in a GOP primary. Unfortunately, the attacks also show an incredible lack of knowledge about the role of private equity firms in the marketplace. Read 

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