We already had President Obama’s tax returns, more than a decades’ worth. Then we got Newt Gingrich’s tax returns. Now we have Mitt Romney’s.
As other presidential candidates routinely do, Mr. Obama released filings for multiple preceding years when he ran for the White House in 2008 and, as incumbents have done since a decidedly reluctant Richard Nixon, has made them public since taking office. Gingrich tossed out his tax returns a couple days before the election returns from the last primary. Several other issues were in play, and personal finances may have been the least of them. So Gingrich’s documents probably did less to assure his smashing defeat of Mitt Romney in South Carolina than the latter’s hemming and hawing over releasing his returns, and for how many years, and when.
The filings only confirmed what everyone (Gingrich, especially) suspected, and what Romney had suggested several days prior — that his effective tax rate was “about” 15 percent, although for 2010 it was still less. Which explains why Gingrich almost gleefully released his 2010 return earlier than do most candidates: on taxable income of $3 million Gingrich paid almost 32 percent to the government as opposed to the $3 million, or 13.9 percent, that Romney paid the feds income on almost seven times greater — about $22 million. (The Obamas paid $454,000 in federal taxes, 26 percent of their $1.7 million income).
There may be room here for outrage, but not necessarily for the reasons the numbers alone represent. While the Obamas and, notably, the Gingrichs paid rather more in taxes, in dollars and as a percentage of their income, than the typical American family, the Romneys tax bite was about average. His adjusted gross income may put Romney in the top .0006 percent, as calculated using Treasury department figures, but his tax rate makes him an 80 percenter — that portion of Americans coughing up 15 percent or less. And how could that be?
Virtually all of Romney’s income was from interest and investments taxed at the capital gains rate of 15 percent, less than half the 35 percent level to which the highest wage earners are subjected (although the effective rate, after deductions are taken and tax strategies deployed, is almost always considerably less; indeed, the Tax Foundation puts the rate at about 24 percent). It’s little wonder that, as exit polls revealed, only the wealthiest South Carolinians, those with incomes of $200,000 or more, were in Romney’s corner. Unfortunately for him they accounted for only about five percent of voters — a demographic not grossly dissimilar in Arkansas.
Independent reporting for Pine Bluff & Jefferson County since 1879.
Romney naturally foresaw the tempest over his tax status but, oddly, had no apparent strategy for calming it other than to hope against hope that he could postpone releasing the information until he had secured the Republican nomination. To the contrary, his defensiveness served only to equip Gingrich with a taunting point, to which Romney’s responses ranged from the self-conscious to the somewhat curious. And the look-what-I’m-about-to-step-in, his rejoinder that Gingrich’s proposal to abolish capital gains taxes would have left the Romney family owing practically no taxes. “I pay all the taxes that are legally required and not a dollar more,” Romney huffed in the hours before South Carolina voted, an attitude most everyone would endorse, even those who consider his tax bill a mite, or several mites, low.
But, in a postscript that still puzzles, he added: “I don’t think you want someone as the candidate for president who pays more taxes than he owes.”
Why wouldn’t we?
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Steve Barnes is host of Arkansas Week on AETN.