Mitt Romney’s real money problem

Just when it looked like Mitt Romney was coasting toward the GOP nomination, he ran into a wealth problem. The problem, contrary to what the Obama administration (and, much more subtly, Newt Gingrich) would have you believe, is not that Romney has too much money and pays too little in taxes. It’s that he apparently is incapable of discussing wealth, and the taxes that the wealthy pay, in a way that offers a compelling contrast to Barack Obama.

Romney was dinged during Monday night’s debate for not having released his past tax returns yet. He tried to play down the matter by suggesting he’d do so come April, when he files his 2011 return. And, ordinarily, one might rationally argue it’s reasonable for a presidential candidate not to disclose so much about his personal life before it is clear that he is at least going to be his party’s nominee.

This year’s election is not any ordinary election, however, because it will be fought largely — maybe even chiefly — on the grounds of class-warfare demagoguery that Obama has been preparing for months. And thus Romney, who is widely known to be wealthy, is not any ordinary potential nominee. The Republican Party has a genuine interest in ensuring it does not nominate someone who can’t stand up to attacks on wealth made by Obama and his surrogates in the Occupy tent camps.

Now, the mere fact that Romney is wealthy does not disqualify him. But his inability, so far, to speak about this issue in a way that changes the conversation in his favor might become a deal-breaker.

Romney let his slip show a bit when he proposed only to cut taxes on those who earn less than $200,000 — a clear sign he wants to avoid the wealth issue. But it’s only gotten worse in the last couple of days.

The first mistake was tactical: Relenting a bit to the pressure his rivals put on him, he said Tuesday that his effective tax rate is “probably closer to the 15 percent rate than anything.” He said he paid that approximate rate because most of his income since he left Bain Capital has come from investments.

But why give his critics such a juicy tidbit if he didn’t have the actual numbers on hand and wasn’t prepared to make a complete argument? He could have waited or, if he felt compelled to respond now, accompanied a rough estimate with an argument defending the current tax rate for dividends (without benefit of seeing Romney’s tax returns, one assumes he’s not making his money as a day trader). He could have pointed out that investment income has already been taxed once at the corporate level — and that, while there are high-profile exceptions, the average total tax rate over the past five years for companies in the S&P 500 was 32.8 percent, meaning most investment income is taxed rather significantly twice by the time investors receive it. He could have make a case, based on his experience in the private sector, that tax rates matter when it comes to capital formation, and that capital formation matters when it comes to economic growth and job creation. And/or he could have argued for eliminating tax loopholes in the corporate tax code and lowering the rate for all companies.

The second mistake was a thoughtless one: While making the aforementioned comments, he added, almost as an aside, that he also gets “speaker’s fees from time to time, but not very much.” Romney might not know how much, but financial disclosures he’s already made indicate that he earned more than $360,000 in such honorariums during a 12-month period.

If Gingrich and the other Republican candidates aren’t already cutting campaign commercials with that line — and the campaign so far makes one wonder if there’s any traditional Republican red line they won’t cross — you can bet Obama and the Democrats are already feeding it into their collection of Mitt “Gekko” Romney’s Greatest Rich Guy Hits. It is of course silly for a man like Obama, who reported nearly $1.8 million in income in 2010, to slam another person for being “rich.” But he will do it, and it will work — unless Romney is prepared to defend himself. The fact that Romney didn’t realize what he was saying, and how it would be played, suggests he hasn’t thought very hard about this issue. Alternatively, maybe he simply hasn’t come up with a defense he’s comfortable with making. Neither option is very reassuring to those who know how the Democrats will attack him.

At worst, it confirms the most legitimate, if not the most spelled-out, fear conservatives have about the man Gingrich calls a “Massachusetts moderate.” It’s not that he has held more liberal positions on certain issues in the past; there’s little chance a President Romney would revert back to those earlier stances once he settled into the Oval Office. Rather, it’s that his experience as a moderate (relative to the rest of the party) Republican in a mostly Democratic state conditioned him not even to recognize or fight back against common but wrong-headed progressive shibboleths.

Romney’s  chief asset in this campaign, the one he has tried to highlight above all else, is his experience in the private sector. But if he can’t draw on that experience to beat back demagoguery about “the rich” and paying one’s “fair share,” it isn’t worth a buck in the political world of 2012.

– By Kyle Wingfield

Find me on Facebook or follow me on Twitter

221 comments Add your comment

Charlie H

January 18th, 2012
11:18 am

There was nothing subtle about Gingrich adopting the Occupy talking points for a temporary political advantage. He’s the one that is supposed to be able to articulate and contrast what it means to be a “Reagan Conservative” as he so often reminds us. Yet when it suits him, he’s more that willing to articulate the other side’s points for his own gain.

That does speak to and reinforce your point about Romney’s problem, however. Romney isn’t able to effectively articulate and contrast the Republican/capitalist vision against that of the Obama record. He’d better learn, or his title will probably be “former candidate”.

Kyle Wingfield

January 18th, 2012
11:20 am

Charlie: I agree for the most part, but you have to admit his move to rename his previously proposed 15% flat tax the “Mitt Romney flat tax” was smoother than usual for him.

Somewhere over there

January 18th, 2012
11:21 am

In other words, it’s bad to want to be rich. Obama is such a classless jerk. He is a millionaire yet libs ignore that fact.

bob

January 18th, 2012
11:21 am

who cares
he is the best of what’s out there
keep hopping the issues and obama will surley get reelected

getalife

January 18th, 2012
11:22 am

Good gawd man, save the billionaires.

Wealth envy?

You cons have Obama envy.

Somewhere over there

January 18th, 2012
11:23 am

” But if he can’t draw on that experience to beat back demagoguery about “the rich” and paying one’s “fair share,” it isn’t worth a buck in the political world of 2012.

Unemployment is 8.6%. Real unemployment is around 20%. If Romney wants to win all he has to do is campaign on “you want a job?” and he’ll win.

Obama has NOTHING to run on. NOT. ONE. THING. His record as president is the worst since Jimmy Carter held office. The class warfare thing will only get Obama so far because most Americans want to work for a living unlike many who vote Democrat.

Somewhere over there

January 18th, 2012
11:24 am

“You cons have Obama envy.”

Bookman wants you back over on his blog with all the other unemployed libs, getalife. Hurry now, scoot along.

Somewhere over there

January 18th, 2012
11:25 am

Kyle, you should really go back down to your previous blog and check out what “The Stench of Racism and the Foul Odor of Hypocrisy” is writing. Again, it’s people like that who ruin blog discussions.

Jefferson

January 18th, 2012
11:29 am

He was serious about the $10,000 bet.

Jefferson

January 18th, 2012
11:31 am

If unemployment continued to climb, you could try to pin that on the President, since the corner has turned it appears you just don’t like the man.

Somewhere over there

January 18th, 2012
11:32 am

“If unemployment continued to climb, you could try to pin that on the President, since the corner has turned it appears you just don’t like the man.”

It will climb.

getalife

January 18th, 2012
11:34 am

“Bookman wants you back over on his blog with all the other unemployed libs, getalife. Hurry now, scoot along.”

I do not bow down to the wealthy or you cons.

JDW

January 18th, 2012
11:35 am

What Romney really has is an almost indefensible position. He is using significant wealth to generate significant income but paying less taxes as a percentage of earnings than people pay on money earned through labor.

His investments are generating no jobs, they are in the secondary investment market which raises no capital for the companies involved. He makes his money based on a rise in perceived value and is given a tax advantage to do so. At the very least he, as should any person profiting from the trading of established securities, should pay the same rate that is incurred by those that labor for their income.

Tealiban Party

January 18th, 2012
11:36 am

Since 1979, after tax income for the top 1% has gone up +281%, while after tax income for the middle and bottom fifths increased a paltry +25% and 16% respectively. And you think it is Obama making “class warfare”? Whose policies (since 1979) solely benefited the rich?

I really have to hand it to the Republicans for trotting out a candidate that demonstrates the worst of GOP policy, especially when 6 in 10 Americans (even 43% of GOP) think millionaires don’t pay their fair share of taxes (according to 12/20/11 CBS poll). You really are handing this election right to Obama.

Anti Free Enterprise Romney

January 18th, 2012
11:40 am

Romney claims to support free enterprise, but doesn’t. He lined his pockets with taxpayer dollars, yet railed against those receiving social benefits in this American Spectator article:

http://spectator.org/blog/2012/01/13/romney-corporate-welfare-bum

Check out this Baltimore Sun article “Corporate Welfare For Bain and Romney”:

http://articles.baltimoresun.com/2012-01-13/business/bal-hancock-corporate-welfare-for-bain-and-romney-20120113_1_corporate-welfare-mitt-romney-bain-capital

Somewhere over there

January 18th, 2012
11:40 am

“He is using significant wealth to generate significant income but paying less taxes as a percentage of earnings than people pay on money earned through labor.”

What a big fat lie.

Somewhere over there

January 18th, 2012
11:41 am

“Since 1979, after tax income for the top 1% has gone up +281%, while after tax income for the middle and bottom fifths increased a paltry +25% and 16% respectively.”

Wealth envy.

Somewhere over there

January 18th, 2012
11:43 am

” 6 in 10 Americans (even 43% of GOP) think millionaires don’t pay their fair share of taxes (according to 12/20/11 CBS poll). ”

CBS!!!!! HAHAHA!!! There’s a “reliable” source. The same wonderful news organization that made up fake documents on President Bush.

Guyr

January 18th, 2012
11:45 am

The fact that Romney is paying less tax than his cleaner, that he thinks that $300k is not a lot of money and don’t forget his “wanna bet $10k?” shows he is either tin-eared about his appearance to a squeezed middle and upper working class; or he simply does not get that this election will be fought over economic and mobility issues.

Regardless of what you think about the Occupiers – the Tea Parties arguments and focus on the deficit and big government have flamed out for this election cycle and it will be fought on their issues of fairness and equality. Where, like it or not, Obama talks the talk and makes Romney look even more like Mr Potter.

getalife

January 18th, 2012
11:45 am

Our economy is improving and you cons want to go back to another collapse.

You will lose.

ByteMe

January 18th, 2012
11:48 am

It is of course silly for a man like Obama, who reported nearly $1.8 million in income in 2010, to slam another person for being “rich.”

But he’s not “slamming” Romney for being “rich”.

He’s going to slam him for being completely out of touch with the regular American existence. (Remember Bush I’s shopping trip and the “new” scanner technologies?)

What’ with his “Mom jeans” he keeps wearing? Regular Americans know better.

Kyle Wingfield

January 18th, 2012
11:48 am

Tealiban: Among other sources, this piece by two University of Rochester professors explains why the stats you cite are far too simplistic.

Tealiban Party

January 18th, 2012
11:48 am

Somewhere over there

January 18th, 2012
11:49 am

“Our economy is improving and you cons want to go back to another collapse.”

In reality it’s not improving at all. Many people have quit looking for work altogether. Just because you say it is doesn’t mean it’s true.

You also said LSU would win the title and the Saints would win the SB.

Your predictions are terrible.

Tealiban Party

January 18th, 2012
11:49 am

Somewhere over there

January 18th, 2012
11:49 am

“Poll: Most Americans Support Obama Deficit Plan to Tax Rich”

US NEWS!!!!! You may as well post a HuffPost or Media Matters poll!

Try again.

Tealiban Party

January 18th, 2012
11:50 am

getalife

January 18th, 2012
11:50 am

Keystone dead.

When was the last time big oil lost?

Somewhere over there

January 18th, 2012
11:50 am

“You will lose.”

You’ve predicted many things which never came true.

I like our odds against your communist commander.

Kyle Wingfield

January 18th, 2012
11:51 am

ByteMe: Whose Mom jeans? These?

Like I said: Silly.

Somewhere over there

January 18th, 2012
11:52 am

“The Bloomberg-Washington Post poll”

Come up with a more credible poll.

getalife

January 18th, 2012
11:52 am

“You also said LSU would win the title and the Saints would win the SB.

Your predictions are terrible.”

I can’t be right all the time.

Name one time when you was right.

Somewhere over there

January 18th, 2012
11:52 am

“What’ with his “Mom jeans” he keeps wearing? ”

Obama is the only guy wearing mom jeans.

Try again.

Somewhere over there

January 18th, 2012
11:54 am

“Name one time when you was right.”

2010 midterms.

2011 national championship game.

2011 World Series.

2000 presidential election.

2004 presidential election.

2006 midterm election.

Jeremy

January 18th, 2012
11:54 am

Fact: 9 in 10 people on AJC comment boards have no idea what they are talking about.

ByteMe

January 18th, 2012
11:54 am

getalife: I expect that the “dead” is temporary and that it’ll be brought back from the dead after the election. There are literally thousands of miles of oil and gas pipelines through those same corridors, so the complaint about it is not likely to be “environmental”, but more “economical” as in: it may take some jobs away from those working on oil exploration in the gulf region.

ByteMe

January 18th, 2012
11:55 am

Somewhere over there is a serial liar. Probably UGA 1999 in disguise.

Somewhere over there

January 18th, 2012
11:55 am

“Fact: 9 in 10 people on AJC comment boards have no idea what they are talking about.”

So you’re one of those people.

Somewhere over there

January 18th, 2012
11:56 am

“Somewhere over there is a serial liar. Probably UGA 1999 in disguise.”

You just contradicted yourself. You call me a liar then accuse me of being someone else.

What did I lie about?

Somali Republican

January 18th, 2012
11:58 am

S O T = bootlicker

getalife

January 18th, 2012
11:59 am

ByteMe,

I did not research it because I thought big oil would win.

They lost drilling in the Grand Canyon too so when big oil loses, that is change.

Jeremy

January 18th, 2012
12:00 pm

Top complaints about Mitt Romney:

#1 – he is too successful
#2 – he wears “mom jeans”
#3 – he pays the taxes as required by law
#4 – he gives away a lot of money
#5 – he invests money he has

Can we try squeezing some actual policy in our discourse people?

getalife

January 18th, 2012
12:00 pm

sot,

Just use one name coward.

You will be on record under that name.

Tealiban Party

January 18th, 2012
12:01 pm

Somewhere over there
January 18th, 2012
11:52 am

No comments on the WSJ poll? Or is that lamestream media too?

Jeremy

January 18th, 2012
12:02 pm

@somewhere over there

an observation I made after reading your post and those of 8 others who also have no idea what they are talking about.

Somewhere over there

January 18th, 2012
12:04 pm

“Just use one name coward.

You will be on record under that name.”

Stop lying, getalife. I’ve only used one name.

@@

January 18th, 2012
12:05 pm

It’s that he apparently is incapable of discussing wealth, and the taxes that the wealthy pay, in a way that offers a compelling contrast to Barack Obama.

It’s why the Obama machine wants him as the nominee. It’s why the media declares him to be “the only one who….”.

The Chicago machine brings a gun…the GOP brings a pea-shooter to “the fight”.

Ain’t nuthin’ subtle about Newt. He’ll be bringing an XM25 Counter Defilade Target Engagement System.

schnirt

Somewhere over there

January 18th, 2012
12:05 pm

“an observation I made after reading your post and those of 8 others who also have no idea what they are talking about.”

So what did I write that makes you think that I don’t know what I’m talking about?

ByteMe

January 18th, 2012
12:06 pm

getalife: I didn’t actually “research” it either, but came across a map researching something else that showed all the oil/gas pipelines stretched across the country.

This is just the natural gas pipelines:

http://www.eia.gov/pub/oil_gas/natural_gas/analysis_publications/ngpipeline/ngpipelines_map.html

getalife

January 18th, 2012
12:06 pm

What makes you think another gop administration would not be like the last?

Do you remember the big pile of stinking crap w left our President.

You cons can ignore the collapse w did not see coming but the rest of the American people do not live in la la land and ignore it.