Tuesday, January 24, 2012

Romney’s Taxes

So the veil has been lifted off Mitt Romney’s tax returns for last year.

Romney’s total wealth is estimated at $190 million to $250 million.

The returns also show that over 2010 and 2011 Romney donated more money to charity, $7 million, than he will pay in taxes, much of that going to the Mormon church. The campaign stressed that Romney’s low tax rate was based on the fact that much of his income comes from 15% tax rate on capital gains, rather than the 35% rate on earned income as well as charitable deductions. They also note that much of the money comes from interest from Romney’s blind trust.

Kind of takes the sting out of being “unemployed,” doesn’t it?

Lest you think I have some kind of grudge against people making a lot of money, forget it. I don’t. I could not care less how much money he makes or how he chooses to spend it. I also think that if he and his accountants have figured out a way to game the system so that he pays as little in taxes as he can, then fine; isn’t that what H&R Block and Turbo Tax are selling us, the average guy with a job and a mortgage and bills to pay… or not?

Whether or not it’s fair is another matter. A totally fair tax system would not distinguish between income earned from working and income earned from investments. The criticism of Mr. Romney or anyone else who makes $33,048 in “less than a day” isn’t a battle of capitalism versus communism; it’s the difference between rewarding someone with a lower tax rate for making money in a way that is inaccessible to a majority of the people. Most Americans don’t have the luxury of investing enough money to earn an income from it alone.

And then there’s the disincentive to use that money for the greater good, and I don’t mean giving it away to the poor or “spreading the wealth.” The people who have $250 million are supposed to be the “job creators.” If that’s true, then where are the jobs that Mitt Romney has created? It sounds like he’s kept a lot of CPA’s busy, but unless his blind trust was the main force behind General Motors and Chrysler coming back (oh, the irony), it’s not doing a hell of a lot of good for the job market. So I’m not so sure as to why people should be rewarded with a lower tax rate for basically doing nothing. Sounds kind of like European socialism to me.

People with more knowledge about taxes and the tax code will have more insight than I do on this matter, but in a way I can see why Mr. Romney was reluctant to release his tax returns: they make him look like what people already think he is.