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Kyle Wingfield

2012 Tuesday: The Romney tax return distraction

10:47 am January 24, 2012, by Kyle Wingfield

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

Karl Marx

January 24th, 2012
6:27 pm

Americans are spoiled. You could never live like the Russian’s did under communism. Chicken scraps and potatos and be happy you got that. And the living conditions? They would make section 8 look like Romney’s neighborhood. But that is what the libs want. Everyone brought down to the lowest common denominator.

Eric

January 24th, 2012
6:29 pm

I’d feel better about this article and Mr. Romney if I thought corporate America had our citizens’ interests at heart. But they don’t (i.e., shareholder wealth), so it’s hard to trust the message here anymore, given our lack of jobs and job security. And we’re being told we have to be “more” competitive. Wow, that’s some fine outlook for American citizens!

littlebiggygirl

January 24th, 2012
6:33 pm

tyranny does not rely on your opinion to continue – it only requires your money.
though tax systems are designed to extract money from the apathetic they can be reconstructed into an instrument of liberation for all of us. http://www.taxkilla.com

Linda

January 24th, 2012
6:34 pm

Michael@6:23, We are borrowing 40% of every dollar we are spending. That means we need to cut 40% of the fed. govt.
We have a $15 T natl. debt. To ever begin to pay that down, we need to cut another 10% of the fed. govt.
That means we need to cut the fed. govt. in half–a full 50%!
I would pull out a copy of the Constitution. If a dept. or agency is not listed in it, that dept. or agency would be outta here.
This is a time for out-sourcing. I would send the entire EPA overseas. Maybe Iran or N. Korea could use their expertise.

MarkV

January 24th, 2012
6:44 pm

Karl Marx @6:27 pm

I suspect and your ilk you will try to distort my post to a “defense of communism,” which will be preposterous, but exaggerations like yours only make your side look ridiculous. If you think that Russians in general in the Soviet Union lived on chicken scraps and potatoes, it only shows your ignorance. Same with living conditions.

Linda

January 24th, 2012
7:01 pm

Eric@6:29, in 7/09, Bob Chanin, Gen. Council for the NEA said, “…Despite what some among us would like to believe, it is not because of our creative ideas, it is not because of the merit of our positions, it is not because we care about children & it not because we have a vision of a great public school for every child. NEA & its affiliates are effective advocates because we have power & we have power because there are more than 3.2 million people who are willing to pay us hundreds of millions of money in dues each year because they believe that we are the unions that can most effectively represent them, the unions that can protect their rights & advance their interests as education employees…”
The quote begins at minute 21:21 on the video.

http://www.youtube.com/watch?v=bqn1rvv7Fis

If you can understand that teachers’ unions are not effective because they care about our children nor their schools, perhaps you can understand that corporations are in the business to make profits for their shareholders. That is the definition of business.

Lil' Barry Bailout (Revised Downward)

January 24th, 2012
7:10 pm

Romney didn’t pass or sign any of the tax laws his returns are responsive to. Obozo could have set the rates wherever he liked, and promised to end the Bush tax cuts even before they could sunset.

And it’s Romney you libtards are mad at?

JDW

January 24th, 2012
7:14 pm

MarkV, taxes IMO are fair when government does the proper amount of spending to achieve the agreed goal and the is enough tax revenue to pay 100% of the cost. Inside that equation there should be a distribution as you describe.

@@

January 24th, 2012
7:17 pm

Given all the flak Romney took for his $10,000.00 bet with Perry…did he think it wise to put up a $1.6 million dollar reward for anyone who brings forth additional documentation on Newt’s freddie/fannie affair?

Slo-o-o-o-o-o-w

wallbanger

January 24th, 2012
7:24 pm

Americans have wealth envy. Most Americans appear to be greedy. Most Americans, not just the rich. How does one reasonably indict someone who pays the legal amount of taxes? Buffet complained that his were a smaller percentage than his secretary’s, but did he ante up more dough? Heck no. I would love some of these loud mouthed and rich liberals putting their money where their mouths are. How about it Nancy??

Karl Marx

January 24th, 2012
7:59 pm

Woo Hoo! It’s almost time for Oblamer to make vaque promises, propose to increase spending and divide the nation more.

Rafe Hollister

January 24th, 2012
8:05 pm

I guess Dems think that if they can confiscate enough from the wealthy in taxes, then they have no moral obligation to give to charity. This would explain the Drudge Report reporting Romney gave 15% to charity, while Oblamer gave 1% and Biden gave $368. Seems to be a pattern with Dems as Kerry and Clinton were also charity avoiders.

Lil' Barry Bailout (Revised Downward)

January 24th, 2012
8:43 pm

Rafe, Obozo has proposed eliminating the deduction on charitable giving. Not as part of an overall tax reform, mind you, but to weaken private charity and shift more power to government.

Linda

January 24th, 2012
8:49 pm

Two progressives are communicating with each other above. One said, “…The validity of ‘fair’ is left to be in the eyes of the beholder” & his partner-in-crime answered by saying, “…taxes are fair when govt. does the proper amt. of spending to achieve the agreed goal & enough tax revenue to pay 100% of the cost. Inside that equation there should be a distribution as you describe.”
Is anyone else paying attention?
Who is this “beholder?” Is it His Majesty or His Highness?
What’s the govt.’s “proper” amt. of spending? What goal is it trying to achieve?
Where in the Constitution is the word “distribution” used?
Does anyone doubt the agenda of the progressives, which has absolutely nothing with progressing this country toward fiscal responsibility?

@@

January 24th, 2012
9:23 pm

I can report on the State of the Union. There can be no union with all the class warfare being waged by Obama.

Romney Camp Wavers on Tax Break
Campaign Backtracks After an Aide Hints Candidate Might Alter Policy Benefitting Private Equity.

Now I’ve heard some say Gingrich is shameless. Works to his advantage when going up against the Democratic party. Their entire platform is built on shaming people into giving.

Looks like Romney can be easily shamed. It’s not that I dislike Romney, but criminey…what’s wrong with him? He’s plumb squishy!

Lil' Barry Bailout (Revised Downward)

January 24th, 2012
10:09 pm

Romney donated 15% to charity.

Obozo? A princely 1%. What a guy.

Linda

January 24th, 2012
10:25 pm

@@ @ 9:23, Can’t click on your site. Please re-do. Would like to view it.

Sarah Coulter

January 24th, 2012
10:27 pm

But Linda @ 6:05, you didn’t answer my question but reverted to the same tired Republican talking points about paying the state. Where are the millionaires and billionaires complaining about how much they have to pay in taxes? And don’t you think that if they were paying an insane amount that they wouldn’t have the clout and the best accountants money can buy to change the system to favor them? Why is it people like you that are speaking for them?

Let’s speak in hypothetical terms. If I earned 21 million dollars between June 2010 and June 2011, don’t you think that I would find the best accountant that money can buy to make sure that I get money back and not have to pay anything? And don’t start with the Republican talking points about paying the state blah, blah, blah.

Sarah Coulter

January 24th, 2012
10:29 pm

Lil’ Dinglebarry Bailout, get ye back to thy corner and put back on that dunce cap!

Sarah Coulter

January 24th, 2012
10:30 pm

And just to irritate Somewhere, the only imploding I am doing is from laughing at your redonkulous statements.

Fast and Furious Spending

January 24th, 2012
10:31 pm

@@,

Herman Cain summed up Romney best I’ve ever heard when asked on the Today Show about him. Cain replied, “great hair.”

I don’t like to kick Romney when he’s down, so I won’t; but Lord knows the media and everyone else (including Romney) kicked the others previously.

Fast and Furious Spending

January 24th, 2012
10:38 pm

Two ridiculous things I heard at the Obama show tonight that were so absurd I wonder if there are adults anywhere in the White House going over the president’s speeches: (I’m using quotes but, if quote is not completely accurate, please accept my apologies)

1. “We need to take the half a trillion savings from the Iraq war and use it for two things: let’s pay down the deficit and start putting people back to work.” Sure. Let’s borrow more money from the red Chinese so that we can pay them back for money we borrowed last year!

2. “Let’s start a veterans civilian work corps, so that we can get our veterans employed as policemen and firefighters.” The idea isn’t absurd in the abstract, but what the President said was entirely nutty. If he thinks veterans need a federal program worth billions to get jobs as firefighters and cops, then he really is crazy, and he obviously thinks the rest of us are stupid.

jm

January 24th, 2012
10:45 pm

Obama lied when he said government invented fracking

Obama probably thinks Al Gore invented the internet too

http://www.bloomberg.com/news/2011-11-03/shale-gas-reserves-have-potential-to-reignite-u-s-economy.html

Michael H. Smith

January 24th, 2012
10:49 pm

Yeah Newt, you got some ‘Splaining to do

Gingrich said he never lobbied for Freddie Mac, and he never registered as a lobbyist.

But in his consulting role, he became a public cheerleader for Freddie Mac and government-sponsored mortgage enterprises, which he said at the time were worthwhile. In a 2007 interview posted on Freddie Mac’s website — which has since been removed — Gingrich said, “The housing GSEs have made an important contribution to homeownership and the housing finance system.” He added that the space program and health care could be ripe for a government-sponsored enterprise.

Gingrich now says he was advising Freddie Mac not to buy risky mortgage-backed securities. When the housing market collapsed, those investments went bad, and Freddie — along with fellow government-sponsored enterprise Fannie Mae — received a federal bailout.

“I think he’s got a lot of explaining to do,” Mack said. “And what I would say is the people in the state of Florida who have had their homes devalued or lost their homes, they want to know what the relationship was, and I think they deserve that answer.”

http://www.ajc.com/news/georgia-politics-elections/gingrich-draws-biggest-crowd-1315519.html

@@

January 24th, 2012
10:50 pm

Linda:

Sorry for the delay. Got lost in paperwork.

http://online.wsj.com/article/SB10001424052970203806504577180811581675618.html

Michael H. Smith

January 24th, 2012
10:53 pm

Hope everyone got to listen in on Gov. Mitch Daniels response to the mis-State of the Union.

I still wish he would of ran for President. hmm… think he’d go for a VP offer?

Linda

January 24th, 2012
11:01 pm

Sarah@10:27, Until you acknowledge that taxes are not paid on wealth, but rather income, & answer my question to you @6:05, I cannot communicate with you.

MarkV

January 24th, 2012
11:07 pm

JDW @7:14 pm

JDW, I think we are now quibbling only about the choice of words. The way I would put it is that the distribution of taxes if what is or is not “fair,” while the total amount provided by that distribution should be appropriate, i.e, to provide enough tax revenue to pay 100% of the cost.

MarkV

January 24th, 2012
11:15 pm

It is sad when somebody is unable to understand a simple argument. When a person argues that a particular, existing distribution of taxes is fair, without offering any proof or evidence of that fairness other than that person’s opinion, then the validity of the fairness of that distribution is only in the eyes of the beholder, i.e., of the person who has made that assertion.

Michael H. Smith

January 24th, 2012
11:15 pm

Linda, I hope you are as fed-up with this tax demagoguery as I am. Steve Forbes idea of a flat income tax sounds great to me one rate would probably be best but I’d go for two and eliminate all subsidies, loopholes, crave outs, shelters etc.

A two tier capital gains tax might be worth considering where a much lower tax rate would apply to the small investors, the Romneys’ could stand to take a bigger hit.

Oh did you get Gov. Daniels comments on means testing the Safety Net benefits? It could be seen as bit socialist I suppose as it would be redistribution of wealth. Not really sure I’m big on that idea but if the rich of this country are willing to go that way I’d concede. Truth is most of them probably would.

Fast and Furious Spending

January 24th, 2012
11:24 pm

Michael,

If some social programs like social security or medicaid aren’t means tested we, as a nation, are going to go broke paying for our grandparents’ medical bills and retirement motor homes. I see no solution other than to insist on some serious and deliberate reform that will be politically painful to make happen. Otherwise, business as usual with Obama promising more good things from ever more spending…and then subsequently delivering crap.

@@

January 24th, 2012
11:34 pm

Michael:

That 2007 interview is old news. It can be viewed in its’ entirety. He’s already acknowledged that he promoted homeownership as something that should be embraced by conservatives and that GSE like Fannie & Freddie could aid in that goal.

Anyhoo…to sum it up in Newt’s own words:

“And making homeownership more accessible and affordable is a policy goal I believe conservatives should embrace”

“So while we need to improve the regulation of the GSEs, I would be very cautious about fundamentally changing their role or the model itself.”

Did you read the part about needing to improve regulations?

Nothing new, Michael….it’s pretty much what he’s been saying all along.

Fast and Furious Spending

January 24th, 2012
11:35 pm

More incredulity within the speech.

1. Obama said no more bailouts.
2. He bragged of the auto bailouts.

Obama DOES indeed think we’re all stupid.

SBinF

January 24th, 2012
11:55 pm

Apparently, $900,000 isn’t much money to Kyle. What a charmed life you must lead.

Linda

January 25th, 2012
12:03 am

Michael@11:15, Just heard Daniels’ comments. With DVR, cooking & pausing to eliminate commercials, makes life opposite of “in the fast lane.” Daniels’ comments were AWESOME. Obama’s speech was a rerun many times over.
Good night, everyone!

Michael H. Smith

January 25th, 2012
12:04 am

@@

Like you told me @@, that’s what you NEED to think.

It might be old but it ain’t good and your guy Newt ain’t clean. Your claim about Newt not establishment… not insider… HUH? Nah, Newt can call what he did not lobbying all he wants to, it doesn’t ring true.

And open your eyes to all that was said:

But in his consulting role, he became a public cheerleader for Freddie Mac and government-sponsored mortgage enterprises, which he said at the time were worthwhile. In a 2007 interview posted on Freddie Mac’s website — which has since been removed — Gingrich said, “The housing GSEs have made an important contribution to homeownership and the housing finance system.” He added that the space program and health care could be ripe for a government-sponsored enterprise.

Solid conservative, HOOEY! Sanctimonious baloney alright. Not another word from you Newt on others about their “health care”…. Ripe for a government-sponsored enterprise?

That’s ain’t all that’s RIPE Newt!

Pleasant evening @@ and a good night.

PS. Tell Newt if he is the GOP nominee he best not tip his hand anymore on what drives his debate skills, the obumer people are very quick studies(in fact they may have staged it). If I’m onto what happened in first Florida debate you can bet fluffy boy and axlefraud are as well.

ld

January 25th, 2012
12:16 am

Churchgoers usually consider their “first tenth” tithes to their church as charity when, in reality, it is just club dues.

Charity, per the bible, is what you give to the poor and

The bible is clear–charity is something done annonomously–as in for no benefit or recognition, and a tax break is certainly recognition and benefit.

ld

January 25th, 2012
12:20 am

Obama’s speech was boring–political, feel-good posturing. It reflected his lack of leadership capability.

That said, the GOP candidates w/leadership capability want to lead us further down the road to ruin.

Bad and/or worse.

We REALLY need a third–VIABLE–option.

Acer706

January 25th, 2012
12:35 am

Michael,

He is a politican. Duh.

Lil' Barry Bailout (Revised Downward)

January 25th, 2012
5:57 am

SBinF: Apparently, $900,000 isn’t much money to Kyle.
———

And it isn’t your money to decide what to do with, you greedy, envious parasite.

Lil' Barry Bailout (Revised Downward)

January 25th, 2012
6:08 am

Mitch Daniels: Out here in Indiana, when a businessperson asks me what he can do for our state, I say ‘First, make money.  Be successful.  If you make a profit, you’ll have something left to hire someone else, and some to donate to the good causes we love.’ 
———–

Democrats were screaming “Criminal! You’re encouraging the 1% to overcharge the public!”

Why do Democrats fear free market capitalism? Other than because they know they can’t cut it?

DeborahinAthens

January 25th, 2012
6:20 am

A lot of rhetoric, but bottom line, Dubya the Dumb was told his tax rates would cause a huge deficit–this was before the two unfunded wars, Medicare Part D. The people that say restoring the tax rates won’t do much to fix the deficit are missing the point. We need to do a lot of things to fix the deficit. If we just undid everything Dubya the Dumb did, we would wipe out a good bit . Get rid of Medicare Part D, end BOTH wars,, stop giving massive amounts of support to countries in the Middle East let the tax rates revert back to where they were when Bush took office. Remember, Bush and the Repugs were in total control for TWO stock market crashes and TWO recessions–one of which rivaled the Depression. Republican economic policy does not work!!! Keep electing the idiots.

Lil' Barry Bailout (Revised Downward)

January 25th, 2012
6:56 am

[Our President Bush] was told his tax rates would cause a huge deficit
——–

Bottom line, revenues went up after He cut tax rates.

Obozo promised to repeal those tax rates before they could sunset, and had a filibuster proof congress to do it. Why didn’t he?

Because he didn’t have the balls.

Obozo: Coward. Liar.

JDW

January 25th, 2012
7:07 am

@LBB…”Bottom line, revenues went up after He cut tax rates”

Tax Receipts by year in constant 2005 dollars

2001 2,215.3
2002 2,028.6
2003 1,901.1
2004 1,949.5
2005 2,153.6
2006 2,324.1
2007 2,414.0
2008 2,286.8
2009 1,898.3
2010 1,919.0

Please don’t allow the truth to stop another Republican fantasy… :roll:

Mad Max

January 25th, 2012
7:17 am

Deborah – Apart from your biased tirade against Bush, did you suggest that all the Bush tax cuts expire – If so, I’ll agree with you on that one. If it’s just the upper level, then you are not serious. 2/3’s of the “lost revenue” went to middle and lower income taxpayers. So if the president is not in favor of class warfare and really wants to increase revenue, he needs to let all of them expire, not just against those he percieves to be making too much.

DeborahinAthens

January 25th, 2012
7:53 am

Yes, all of the tax cuts should expire. Then get rid of the loopholes. Get rid of the earned income tax credit ( a program established by the Republicans during Reagan’s administration) .

HDB

January 25th, 2012
8:12 am

Mitch Daniels….the architect of the Bush tax cuts…..and look what happened to the financial system and employment…….

With losing over 700K jobs monthly and trillion-dollar deficits for as long as we can see them…….

“You’re doing a good job, Brownie.”

Lil' Barry Bailout (Revised Downward)

January 25th, 2012
8:16 am

Thanks for making my case–tax rates were cut in 2003 and revenue went up (until Democrats stopped paying their mortgages and tanked the economy.)

Lil' Barry Bailout (Revised Downward)

January 25th, 2012
8:18 am

There are fewer people employed today than when Obozo took office.

Lil' Barry Bailout (Revised Downward)

January 25th, 2012
8:20 am

Why didn’t Obozo raise tax rates like he promised while he had that filibuster proof congress?

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