From Last Word:
Attention tax nerds, we found an awesome graph via The Fix, showing how Romney’s tax returns compare to previous presidents. It’s incredible. Note, the Sunlight Foundation provided all the data; we added the OMG arrow ourselves.
Rep. John Fleming’s “By the time I feed my family, I have maybe $400,000 left over” quote is running around the Internet faster than Tea Partiers applaud executions and curse freedom-hating uninsured folk.
The quote wasn’t quite that straight-forward, which was pointed out by Tumblr user fochaux.
While people are quick to disregard this quote as out of context - though not as quick to Political Wire was to pull this statement out of context - I have yet to see anyone actually provide the full context. So here you go.
Chris Jansing: Is there a real disconnect with most of America that’s really hurting, Congressman, and we’re seeing through loopholes… through funny accounting… through all the ways that people have money to hire accountants - spend a fraction percentage-wise… give the government a fraction of their income… compare to what middle America does?
Rep. John Fleming: Again, if you go after the higher income earner, you’re also going after the job creators.
Jansing: Okay, explain this to me, because I’m truly trying to figure this out. I’m not an economist, I don’t own businesses and I know that you do. But aren’t we talking about taxing people who are making personally - their personal wealth - a million dollars and more a year? How does that hurt them from their business which is successful… and we know that businesses are making more money than they have been in a very long time when you look at the corporate earnings -
Fleming: Yes, right.
Jansing: How does that stop them from hiring people?
Fleming: The answer is no for two reasons. Number one: this actually raises taxes on those making $200,000 and more, and then an additional tax on those making $1 million and more. Most small businesses in this country today are taxed at the individual level - S corporation, LLC. So whatever is cut out of those earnings is money taken out of capital for re-investment for creating more jobs, opening up more locations. So the more you tap that down, the less jobs are going to be created -
Jansing: But that’s still separate from their own personal income.
Fleming: No, no, it’s all mixed together.
Jansing: Well you can’t use - you still have to file a personal income tax. If you’re taking a salary from a business you own, those taxes are separate from your own personal income taxes.
Fleming: No that really isn’t how it works, Chris. What happens is, in my own case - I own LLCs - the income flows to my personal tax return and whatever is left over after taxes are paid, I feed my family on the one hand and on the other hand I re-invest in my business.
Jansing: Well, with all due respect Congressman, the Wall Street Journal estimated that your business - which I believe are Subway sandwich shops and UPS stores, very successful - brought you last year over $6 million.
Fleming: Yeah, that’s before you pay 500 employees, you pay rent, you pay equipment and food. The actual net income of that was only a mere fraction of that amount.
Jansing: So you’re saying that if you have to pay more in taxes, you would get rid of soem of those employees? Those are not as successful business as we indicated?
Fleming: I would say that since my net income - and again that is the individual rate that I told you about - the amount that I have to re-invest in my business and feed my family is more like $600,000 of that $6.3 million. And so by the time I feed my family, I have maybe $400,000 left over to invest in new locations, upgrade my locations, buy more equipment, all of that.
Jansing: You do understand Congressman that the average person out there who’s making 40, 50, 60 thousand dollars a year… when they hear that you only have $400,000 left over… it’s not exactly a sympathetic position. You understand that?
Fleming: Well again, class warfare has never created a job. That’s people that will not get jobs. This is all about creating jobs, Chris. This is not about attacking people who make certain incomes. In this country, most people feel that being successful in their business is a virtue, not a vice. And once we begin to identify it as a vice, this country is going down.
The most interesting revelation to come out of this clip is that it apparently takes costs the Congressman $200,000 to feed his family. Even if he more broadly meant it costs him $200,000 to generally support his family, let’s face it: the man is still very, very well off compared to his 46 million neighbors. On the business side - as much as I love to stick my nose where it doesn’t belong - I can’t comment on his $400,000 income because I have no idea what his operational costs are or what his typical expense sheet looks like.
The idea of $400,000 left over to use for business stuff after “feeding my family” is difficult for me to comprehend. Poor, poor you, Congressman.