Today Mitt Romney released his 2011 tax returns. The returns show he earned about $13.7 million, and paid about $1.9 million in taxes. That equals out to an effective tax rate of 14.1%. The former Massachusetts governor went on to say that over the past 20 years his tax rate was around 20%, and that he never paid below 13.66%. Romney’s tax returns have been a hot topic all year since he decided he would not release more than two years worth of returns. Candidates, including President Obama, typically release many more years of tax returns.
The debate over Mitt Romney’s taxes took a nasty turn when Senate Majority Leader Harry Reid stated that sources he spoke with claim Romney did not pay taxes for ten years. Reid was not accusing Romney of breaking the law, but rather using the tax code to his advantage through tax breaks and off shore accounts. Romney has denied this claim, but refuses to release any additional tax returns to prove Reid wrong.
Mitt Romney’s tax rate is now more politically important than it was when Reid made his claims. An undercover video that was recently released shows Romney decrying those that pay no federal income to campaign donors. In the video, Romney says that he will not be able to win the 47% of voters that do not pay income taxes because they are dependent on government, and he wants to cut government spending. He went on to say he can not get those voters to take responsibility and care about their lives.
The video has been very damaging to Mitt Romney politically, but it could get much worse if it is discovered that he himself did not pay federal income taxes in a given year. The video has caused a massive uproar for numerous reasons. Many of those that don’t pay taxes are seniors, an important Republican voting bloc. Military veterans are also in that group, as are many middle class families. There are even millionaires that do not pay taxes thanks to generous tax breaks.
The irony of the statement is that Republicans themselves wiped out many people’s tax liabilities with repeated tax cuts. Popular tax credits like the child tax credit, which was expanded under President Bush, cause some people to get back more money from the government than they pay in. In a double twist, Romney now seems to be making a pseudo tax fairness argument similar to the one pushed by President Obama and the Democrats, except he wants the poor to pay their fair show as opposed to the rich.
The fact that much of Mitt Romney’s policy revolves around taxes makes his decision not to release multiple years of tax returns highly dubious. He claims that he doesn’t want to give additional fodder for Democrats to rifle through, but they have found plenty of ammunition without his tax returns. If he would have agreed to release his returns months ago, this would not be nearly as big a story as it is today. Romney’s secrecy only further fuels speculation that there is something unseemly in his tax returns.