L.A. mayor calls tax code unfair, cites Mitt Romney (+video)
L.A. Mayor Antonio Villaraigosa said the news that millionaire Mitt Romney has been paying federal taxes at close to a 15 percent rate is going to spur talk about fixing the US tax code.
Washington — Republican presidential candidate Mitt Romney’s admission that he has been paying federal taxes at close to a 15 percent rate “is going to generate a great deal of debate” about fixing the nation’s tax structure, says Antonio Villaraigosa, mayor of Los Angeles and president of the US Conference of Mayors.
“If you ask the vast majority of Americans right now, they don’t want to raise their taxes but they do want to make investments and they do want to close tax loopholes,” Mayor Villaraigosa said at a Monitor-hosted breakfast for reporters.
“There should be a real discussion and a real debate around fixing our tax structure,” the mayor said. “The corporate tax rate is too high…. The capital gains rate is too low. There should be a middle ground here to spur investments.”
The maximum tax rate on long-term capital gains is 15 percent. The same maximum 15 percent rate applies to dividend income on stocks held a required period of time. Mr. Romney’s financial disclosure forms indicate that he has benefited from those rates on capital gains and dividends. He has not released his tax returns but said he would do so in April.
Meanwhile, corporate advocates argue that the maximum federal tax rate on corporate profits (35 percent) makes it difficult for American firms to compete with foreign firms taxed at a lower rate. Some academic studies indicate that, by using various tax breaks, many companies have an effective tax rate which is significantly lower than 35 percent.
Villaraigosa argued that his views are “not about taxing the rich.” Instead, he said, “We have always stood for the proposition that we should have a fair tax code – one that acknowledges that when you make a little, you pay a little to the government. When you make more, you pay more. That is not a radical notion.”