CAMPAIGN 2012 --- Mitt Romney's Tax Returns: Here's What Really Matters
His tax return doesn't prove that he's done something wrong, only that the tax code is wrong.
By Derek Thompson, The Atlantic
January 24, 2012 | 11:43 a.m.
Here's what we know about Mitt Romney's money in 2010 and 2011, based on 500 pages of tax returns he released late Monday night: He made $43 million in income over those two years. Almost all that money came from investments such as capital gains on investments and compensation from Bain Capital. None of it came from wages.
Here's what we know about Mitt Romney's taxes: Romney has donated more money to charity -- $7 million, including $4.1 million to the Mormon church -- than he owed to the IRS over the last two years. In 2010, Romney's effective tax rate was 13.9 percent. In 2011, his estimated effective tax rate will be 15.4 percent. Romney's average effective tax rate is considerably lower than most people in the top 10 percent -- or even the top 0.1 percent -- because his income comes almost entirely from capital gains, dividends, and interest, which are taxed at a lower rate than earned income from wages. Romney's effective tax rate is also higher than that of many middle-class families, who -- unlike the former Massachusetts governor -- owe payroll taxes.
[...] "Gov. Romney has paid 100 percent of what he owes," a Romney spokesperson said on a conference call this morning. I believe him. Mitt Romney is a remarkably successful businessman, and his wealth reflects a legally gained fortune which is being taxed according to the law.
[...] It's not that Romney's tax return proves he's done something wrong. It's that his tax returns prove that the tax code is wrong. Households worth $200 million earning $20 million in investment income a year shouldn't be paying a lower tax rate than some middle-class families, especially at a time when we're thinking about cutting spending that disproportionately benefits the lower and lower-middle class.
Romney's tax return could serve as an inflection point in the tax discussion. You might say it already has. Consider Monday night's debate in Florida, when Mitt Romney told Newt Gingrich that the former speaker's tax plan goes too far, since it would lower Romney's own tax rate to zero. This was a remarkable moment. The GOP front-runner, who's won the endorsement of almost every serious conservative mainstay, stood athwart tax cut-mania conservatism and said, "Stop." Or at least, he said: "Too far."
In an election that will be about inequality and taxes, Mitt Romney's tax returns are a glowing artifact of inequality in the tax code. And by proposing to make capital gains entirely tax-free, Gingrich favors a tax plan that would make our law even more unequal. That's why, even without the polls, you can fairly say that Mitt Romney's tax returns matter.
Gingrich is dangerous to the 99%. He is not friendly at all to the middle and lower classes. He is worse that way, than Romney. Tax the Rich fairly. Make them pay fairly for the privileges and joy that life in the nation accords them. They, quite simply, are too heavy for the rest of us to carry. They are too privileged for the rest of us to suffer. They are too greedy, Gingrich feeding that greed by pandering to it. Greed is not good.