2012 Tuesday: The Romney tax return distraction
Mitt Romney’s tax returns are slowly leaking out, with full details to come later today. (UPDATE: The 2010 returns and 2011 estimates are available on Romney’s campaign website.) And as fully expected, progressives are in high sanctimony about his effective tax rate of 14 percent — as if they would have thought he’d fulfilled his patriotic duty by paying 25 percent, or 35 percent, or 50 percent, and still had well over $10 million they hadn’t gotten their claws on.
Lefties who always harken back to the Clinton-Gingrich-Lott years as a golden era of satisfactory, budget-balancing tax rates seem oblivious to the fact that the difference between what Romney paid under the current rates and what he would have paid under the rates that prevailed then is roughly $900,000. No, you’re not missing a decimal point: At a top income tax rate of 39.6 percent and a capital gains rate of 20 percent, Romney would have paid something like $900,000 more on his $21.7 million in 2010 income (capital gains of $20.8 million and other income of about $0.9 million).
If you actually believe an extra $900,000 in taxes paid would have spared Romney this political headache, I’m surprised you can actually read this blog post.
But that’s not all. Let’s say Romney’s capital gains not only had been taxed at the same top rate as regular income in 2010 (35 percent) but that he hadn’t been able to reduce his taxable income through charitable donations. In that case, Romney would have had something like $14.1 million left over after federal taxes (and a lot of charities would have failed to help a lot of people, but that’s another argument for another day). In reality, Romney donated $2.98 million to charity and paid $3 million in federal taxes, leaving him with $15.7 million.
Again, it’s foolish to believe the wealth-envy industry would have been satisfied with such a difference.
We could run any number of scenarios producing any number of hypothetical results (none of which would be truly accurate, because they all wrongly assume a differently structured tax code wouldn’t have affected Romney’s behavior). At the end of the day, it’s not really about that.
It’s not really about balancing the budget — not when the president and congressional Democrats make no secret of their desire to increase spending at least as fast as revenues might grow. Witness President Obama’s 2012 budget proposal, which assumed taxes would go up as he desired starting in 2013 — and yet, for the rest of his presidency, would not have cut the budget deficit even to 3 percent of gross domestic product. His budget deficits after raising taxes would have remained higher as a share of GDP than George W. Bush’s average budget deficit from the time he cut taxes until the housing bubble burst.
It is, however, about whose vision is best for the economy: Obama’s vision of a government that consumes a larger share of Americans’ production than this country has ever seen on a sustained basis, or the alternative of a government that returns to a rational size based on our historical experience and economic reality.
Because conservatives understand and acknowledge that tax rates affect individuals’ and businesses’ incentives and thus their behavior — the left understands this, but only acknowledges it when arguing for policies such as “green” taxes — we often get bogged down talking about the tax code. (Yes, my hand is raised here, too.)
But as Milton Friedman taught us, what really matters for the economy is the size of government spending. What the citizens don’t pay in taxes now, they pay in future taxes (debt) or price inflation. (Credit where credit’s due: Ron Paul is the only presidential candidate who consistently makes this case.)
The left is not making an issue of Mitt Romney’s tax rates out of an interest in closing the budget deficit. As Reagan learned to his chagrin, agreeing to raise taxes in exchange for promises of spending cuts only leads to higher taxes and higher spending. It would happen again if Obama-Pelosi-Reid got their way and took a larger chunk from “the rich,” as their unserious proposals for “cutting” spending demonstrate.
It is purely the politics of envy and redistribution: See those rich people like Mitt Romney? If you elect us, we’ll take more from him and give it to you.
That’s what the Romney tax returns story is really about. Shame on those Republicans who go along with it for their own temporary political gain, and woe to Romney if he can’t use this occasion to make the case for keeping money in the private sector rather than siphoning it off for ever-larger government.
– By Kyle Wingfield
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356 comments Add your comment
Hillbilly D
January 24th, 2012
1:49 pm
Inflation has already hit regardless of what we’re being told.
I keep track of my mandatory expenses (discretionary spending isn’t included in the total) and it was up 7% for this last year and over 6% the year before that. Ben Bernacke, like most of the Fed people, doesn’t live in the real world.
@@
January 24th, 2012
1:51 pm
UGA:
@@…..pot meet kettle!
Thanks for the introduction, and you are….?
I may see Romney as lacking backbone, but I have no problem with the amount he pays in taxes. He’s contributing more than me in both charitable contributions and tax obligations.
In other words, I’m NOT complaining!!!!
You’re weird.
Matthias Klein
January 24th, 2012
1:52 pm
Who won the debate?
Who was pleasing the voters the most? OR Who was pleasing God the most.
Since the latter question is decisive for the future of a country I will will talk about it.
Nobody was focusing on God’s will. Nobody was giving Him honor for the good that happened and nobody was talking about the law of Christ, whom is given all authority.
So I cannot tell who was most pleasing to God.
Watch: German preacher’s thoughts on 2012
http://www.youtube.com/watch?v=gpLYq525SpM
UGA 1999
January 24th, 2012
1:55 pm
@@…..great we agree.
@@
January 24th, 2012
1:58 pm
Hillbilly:
The cost of groceries alone is a real showstopper. Not complaining, mind you…gives me a good reason not to cook. I’m pushing leftovers…something my husband has never been thrilled about. When I’m feelin’ generous, I transform them into something he doesn’t recognize.
(IW&SH)
Somewhere over there
January 24th, 2012
1:59 pm
“So let me get this straight (or gay). If gay goes up, won’t food go up? Unless all grocery stores have a farm and slaughterhouse in their backyard.”
Not sure how “gay” goes up, loser.
@@
January 24th, 2012
1:59 pm
UGA:
You need to quit taking shots at anything that moves. You’re wasting ammunition.
Somewhere over there
January 24th, 2012
2:00 pm
“Kok….are you Gm? Learn an language other than ebonics so that we can understand you! HA!”
Most likely one of the Bookman trolls. I’m sure Kyle will take care of that trash real soon.
Somewhere over there
January 24th, 2012
2:01 pm
Sarah Coulter
Grow up.
UGA 1999
January 24th, 2012
2:01 pm
Somewhere…..lets all hope so.
You need to come back me up on the new Galloway thread.
ByteMe
January 24th, 2012
2:01 pm
New poll just came in:
52 percent of Americans say that capital gains and dividends should be taxed at the same rate as income earned from work because the current policy increases the federal deficit and is unfair to people who don’t have money to invest, according to the poll. Thirty-six percent approve of the current policy of taxing capital gains at a lower rate because it encourages investment and helps the economy.
…
While most Americans would seem to back the Buffett rule, the poll shows there are partisan differences on this question. Fifty-five percent of Republicans approve of the current policy, while 66 percent of Democrats say capital gains should be taxed at the same rate as employment income. Among independents, 54 percent say capital gains should be taxed at the same rate as work income.
Somewhere over there
January 24th, 2012
2:02 pm
“New poll just came in:”
Source?
Somewhere over there
January 24th, 2012
2:02 pm
“You need to come back me up on the new Galloway thread.”
Who, what?
Tiberius - Your lightning rod of hate!
January 24th, 2012
2:08 pm
Democrats. The poll-driven, lack of principles political party. The word “democrat” gets its origin in the term “One who panders to the masses”.
Which is why we do not have a true democracy.
And why polls don’t really matter when it comes to policy. Constitutional principles matter.
ByteMe
January 24th, 2012
2:11 pm
And why polls don’t really matter when it comes to policy. Constitutional principles matter.
Unless you’re talking to those people who want a “Christian nation” and then it’s all about how many Christians there are.
Hillbilly D
January 24th, 2012
2:13 pm
I’m pushing leftovers…
I was into leftovers before leftovers were cool, when I have any. Mama always made us eat everything on our plates and I’m still in that habit. I fix just exactly what I want to eat, right now, and not a bit more. That way no leftovers, to speak of. Of course if you do have leftovers, a hog is the best way to dispose of them. I’ve been thinking about getting me one. They’re pretty easy to raise and their lifespan is only about 6 months, if you plan it right.
@@
January 24th, 2012
2:16 pm
The “Buffett Rule” is just playing to the crowd. The dems controlled both houses during the first half of Obama’s rule. Nothing was done then.
He’s only pushing it now because he’s knows Republicans won’t go for it. It’s an election gimmick.
I’m with Hillbilly…flat tax is the only way to go.
Somewhere over there
January 24th, 2012
2:20 pm
“Unless you’re talking to those people who want a “Christian nation” and then it’s all about how many Christians there are.”
Or those who want an atheistic utopia, sharia law, etc… Or perhaps those who want to push gay marriage on others.
It goes both ways.
@@
January 24th, 2012
2:24 pm
ByteMe’s poll comes from CBS.
Hillbilly:
I’ve been thinking about getting me one. They’re pretty easy to raise and their lifespan is only about 6 months, if you plan it right.
You’re zoned for livestock? You’ve always left me with the impression that “humanstock” had taken over your neck of the woods.
I ain’t eatin’ anything ——I——- have to kill. I’ll leave that dirty work to others. Vegetables don’t have eyes, ‘cept taters, and they can’t see with ‘em.
(ISH)
Somewhere over there
January 24th, 2012
2:26 pm
“ByteMe’s poll comes from CBS.’
May as well get a poll from Media Splatters.
Somewhere over there
January 24th, 2012
2:27 pm
This is exactly what the Obozo administration wants. Violence.
George Soros on the Coming U.S. Class War
http://www.thedailybeast.com/newsweek/2012/01/22/george-soros-on-the-coming-u-s-class-war.print.html
Tiberius - Your lightning rod of hate!
January 24th, 2012
2:32 pm
“Or perhaps those who want to push gay marriage on others.”
Uh, Somewhere? No one is suggesting pushing gay marriage “on others”. You need to worry more about your own personal life than the personal lives of others.
What part of “equality” do you NOT get?
Hillbilly D
January 24th, 2012
2:32 pm
@@
We don’t have zoning where I live (and even if we did, we’d all ignore it. What my neighbor does on his place is his business and none of mine). My closest neighbor is 300 yards away, which even though he is a perfect neighbor, is too damn close. It’s been invaded with people compared to how it used to be; a 1/2 mile away is plenty close enough for a neighbor. The population on this road is about 10-15 times what it was when I was a kid. Everything is relative.
Vegetables don’t have eyes, ‘cept taters, and they can’t see with ‘em.
And how do you know this? Are you fluent in the language of taters? (IW&SH)
Somewhere over there
January 24th, 2012
2:34 pm
“Uh, Somewhere? No one is suggesting pushing gay marriage “on others”. You need to worry more about your own personal life than the personal lives of others.”
Uh….yeah they are.
“What part of “equality” do you NOT get?”
What part of STFU, do you not get?
@@
January 24th, 2012
2:40 pm
Hillbilly:
And how do you know this? Are you fluent in the language of taters?
Well…there are some AJC bloggers who’ve compared my intellect to that of a tater.
(IHugeSH)
Sarah Coulter
January 24th, 2012
2:42 pm
Somewhere over there:
You are a gem. And since you like to use the word “Obozo” (juvenile and infantile), I am going to reply to your “loser” with “I know you are but what am I?”
And you know that if gas goes up, so does the price of food. Unless the grocery stores have a farm and slaughterhouse in their backyards.
Hillbilly D
January 24th, 2012
2:47 pm
When the price of gas goes up, the price of everything goes up. I still believe that the price of gas in September/October may be the biggest factor in who wins the 2012 election. The other day I heard they are predicting $5 a gallon by the end of the year. I don’t know how accurate that is and hope it isn’t true but if it does go that high, you’re pretty much guaranteed a new occupant in the White House. I don’t think the President, whomever he is, has a lot to do with the price of gas but that don’t matter, that’s who the voters will take it out on. If the price of gas goes down between now and then, you may well see the opposite effect.
Somewhere over there
January 24th, 2012
2:49 pm
“You are a gem. And since you like to use the word “Obozo” (juvenile and infantile), I am going to reply to your “loser” with “I know you are but what am I?””
You must be under the false impression that I care what you think.
Linda
January 24th, 2012
2:51 pm
Kyle, What has gotten into you? Did you write that piece? It is fantastic, not just in substance, but in tone.
“…progressives…high sanctimony…lefties…oblivious…surprised you can actually read this blog post…wealth-envy industry…politics of envy & redistribution…”
The best part was “…the president & congressional Democrats make no secret of their desire to increase spending…”
Today marks 3 years that the Senate has not passed a budget. Obama’s budget failed in the Senate 0-97 last year. They ARE trying to keep secret their desire to increase spending, from their minions.
carlosgvv
January 24th, 2012
2:53 pm
Kyle, a good start to getting us not of your conservative persuasion to give you more credence would be to stop calling liberals “lefties”.
redneckbluedog
January 24th, 2012
2:57 pm
Lot’s of anger in here directed at Democrats….when, in fact, it’s Georgia’s own, Newt Gingrich, that’s pointing out the tax disparity in America…!!!
clyde
January 24th, 2012
1:46 pm
Let’s suppose that I had made the money Romney made and let’s suppose I paid the same tax.Does anyone out there really think I would still be working?????
I wouldn’t be stupid enough to be running for President either.
————————————————————————————————-
To your point…There are rumors circulating, in far right-wing conservative circles….that perhaps Mr. Romney has a secret Mormon agenda…….Just sayin’….I saw it on the internets…!!!!
Intown
January 24th, 2012
2:57 pm
Romney’s tax returns probably are a distraction. Woe to Romney’s PR team who did not handle this story better.
Sarah Coulter
January 24th, 2012
3:00 pm
“You are a gem. And since you like to use the word “Obozo” (juvenile and infantile), I am going to reply to your “loser” with “I know you are but what am I?””
You must be under the false impression that I care what you think.”
Obviously you do since you responded.
waterstim
January 24th, 2012
3:01 pm
Here you go folks, straight from the community organizer: Under Obama, Price of Gas Has Jumped 83 Percent, Ground Beef 24 Percent, Bacon 22 Percent. GET HIM OUT OF HERE!
Hillbilly D
January 24th, 2012
3:04 pm
it’s Georgia’s own, Newt Gingrich,
Newt’s from Pennsylvania.
GT
January 24th, 2012
3:07 pm
This game is being played on your front yard, sport, there is not a Democrat in sight. So why do you try to blame us for a totally made in the Republican Party problem? Not only do you blame Obama for a Bush economy, go starts wars for the wrong and non existing reasons, now you guys are bringing us into your huddle and blaming us for your stupidity. This is rich, this is so Gingrich.
Linda
January 24th, 2012
3:08 pm
redneck@2:57, If you saw it on the “internets,” it must be true, especially since Al Gore “invented” it.
@@
January 24th, 2012
3:20 pm
Gallup: Gingrich leads Romney in national poll
Gingrich’s gains over the last week have come mostly among conservative Republicans, one of the groups that has been most “in play” throughout the Republican presidential nomination process.
Over the two-week period between Jan. 9-15 and Jan. 16-22, Gingrich’s support among conservative Republican registered voters increased from 16% to 28%. Romney’s support among conservatives fell between these two weeks, from 36% to 28%. By contrast, Romney’s support among moderate and liberal Republicans held constant across these two weeks, while Gingrich gained six points.
What the heck is a “liberal Republican”?
redneckbluedog
January 24th, 2012
3:21 pm
@Hillbilly D
January 24th, 2012
3:04 pm
it’s Georgia’s own, Newt Gingrich,
Newt’s from Pennsylvania.
——————————————————
HA HA HA HA HA……I don’t blame you…..:-)…….God Bless Paul Coverdell….!!!!
MarkV
January 24th, 2012
3:25 pm
Kyle,
What you have written is insulting; no wonder you get accolades from some on this blog. “wealth-envy industry,,” “politics of envy & redistribution” Is it so much beyond you power of understanding that people who want fairness in taxes do not have to be led by envy? Do you have any evidence for your insulting words?
Perhaps the most ridiculous part of your article is when you make the following argument:
“Lefties who always harken back to the Clinton-Gingrich-Lott years as a golden era of satisfactory, budget-balancing tax rates seem oblivious to the fact that the difference between what Romney paid under the current rates and what he would have paid under the rates that prevailed then is roughly $900,000. No, you’re not missing a decimal point …”
I wish you were a politician and had to go and tell that to voters, for whom that negligible (to you) amount may represent a 20 year family income.
GT
January 24th, 2012
3:26 pm
A “liberal Republican” is the only hope you have, or as some of us call you’re trying to say,” a normal moderate” that is not a fruitcake.
Somewhere over there
January 24th, 2012
3:27 pm
“Obviously you do since you responded.”
HAHAHAHA!!!!!!
Somewhere over there
January 24th, 2012
3:28 pm
“What the heck is a “liberal Republican”?”
Someone who claims to be a Repub but only votes Democrat.
@@
January 24th, 2012
3:30 pm
“a normal moderate” that is not a fruitcake.
Homophobe, GT?
Jes kid’n.
Somewhere over there
January 24th, 2012
3:31 pm
Occupy Wall Street = Obama’s Willing Servants.
Linda
January 24th, 2012
3:35 pm
A liberal Republican is a RINO, a Republican in name only. They are to the Republican party what Blue Dog Democrats are to the Democratic party: a pain in the neck.
GT
January 24th, 2012
3:35 pm
Envy? Wanting the upper 1% to get involved in this country is now called envy. Maybe if they got more involved, like in paying for things they might get off their high horses and run a qualified candidate. As it is they obviously do not care, and why should they. And why should we the left who are being handed an election by default. There is just something about a one party system that should worry all of us, but all we can do is handle our side of the street. I fully expect Gingrich to challenge Mitt to a Hamilton dual in one of his feverish illusions and pull a gun out on his coat. If he has shot Romney on stage in SC he might have gotten 99% of the vote instead of 41.
Somewhere over there
January 24th, 2012
3:38 pm
” Wanting the upper 1% to get involved in this country is now called envy”
It’s not the rich folks fault that your poor. Maybe you should quit crying, change your diaper and save your money.
Kyle Wingfield
January 24th, 2012
3:39 pm
GT: Other Republicans made an issue of Romney’s releasing his returns, but the White House press secretary — among others — has already jumped on this issue. So, while it might be shameful for Gingrich and Santorum to raise the issue and watch Democrats do their dirty work (as I said in the OP), it’s not the case that “there is not a Democrat in sight.”
Sport.
Kyle Wingfield
January 24th, 2012
3:42 pm
MarkV: Where did I say $900,000 was negligible? If I thought it was negligible, why would I object to its being taken in taxes?
What I said, quite plainly, is that it’s not enough to satisfy the wealth-envious. To hear them tell it, Romney is stiffing the country by a lot more than $900,000 — and they sure as heck want a lot more than an additional $900,000 out of the likes of him.
As for the motivation: When someone can define “fair share,” I’ll start taking seriously the notion that this conversation is driven by more than envy and pandering.