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The political significance of Mitt Romney’s hidden tax returns almost certainly has to do with his tax rates. The Republican frontrunner has been reluctant to admit he pays much lower tax rates than middle-class workers, despite the vast wealth he made during his vulture-capitalist career.
It was noteworthy, then, that Romney managed to tell the truth this morning. “What’s the effective rate I’ve been paying? It’s probably closer to the 15% rate than anything,” Romney said. “My last 10 years, I’ve — my income comes overwhelmingly from some investments made in the past.”
The politics of this are awful for the likely GOP nominee. Working families probably won’t be amused to learn Romney — the guy who got rich laying people off, and has been a professional candidate for the last six years — pays a lower tax rate than they do. They’ll be even less pleased to know Romney, if elected president, will fight to keep it this way, even when he calls for tax increases on those struggling most.
What’s more, while Romney’s candor was a change of pace this morning, as Paul Krugman and Jamison Foser explained earlier, we still need to see those tax returns.
But Romney said something else at the same event that’s worth remembering.
Mr. Romney added: “And then I get speaker’s fees from time to time, but not very much.”
In fact, in the most recent year, Mr. Romney made $374,327.62 in speaker’s fees, at an average of $41,592 per speech, according to his public financial disclosure reports.
There’s some dispute about the precise figure from Romney’s disclosure forms, but at a minimum, he earned $362,000 in speaking fees last year.
In Romney’s mind, that’s “not very much” money.
For a candidate already accused of being an out-of-touch elitist, unaware and unconcerned about the struggles of working families, this is clearly another “uh oh” moment.
As American Bridge joked, for most of us, “not very much” refers to money “found in the couch.” For Romney it means over $360,000.
This is the same guy who recently suggested elected office is only for the rich, thought nothing of dropping $10,000 on a bet during a debate, and considered a $1,500-a-year tax cut for the typical middle-class family to be a meaningless “band aid.”
Remember when Rachel Maddow compared Romney to Thurston Howell III? It was well grounded.
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samsa on January 17, 2012 12:39 PM:
We need to admire the Romneys and if we are religious have altar in our houses dedicated to them so we can pray to them every morning. They are such nice people: if our prayers reach them, they will make us all rich just like themselves.
goterpsgo on January 17, 2012 12:40 PM:
I don't recall anyone using the term "elitist" lately. I wonder of the GOP now realizes that term cuts both-ways.
T2 on January 17, 2012 12:46 PM:
it occurs to me that if it weren't for the Mormon thing, Mitt would be an ideal GOP candidate....rich, out of touch, lies at the drop of a hat, no morals.
TCinLA on January 17, 2012 12:48 PM:
If the Democrats fail to sink the Republican Party, with this large slow target at their head, we deserve what we get.
The one thing that worries me about the mistakes made in Gingrich's "King of Bain" is that when the time comes to go after this pig he can argue that "those were all lies" and the idiots of the political Press Corpse will let that one slide past like they do with all his other lies.
Kiweagle on January 17, 2012 12:58 PM:
...and considered a $1,500-a-year tax cut for the typical middle-class family to be a meaningless band aid.
I'll go you one better: His tax plan would provide an average of $150 for the typical middle class wage earner.
God help us all if this clown wins...
Danp on January 17, 2012 1:02 PM:
If he made 360K in earned income, and his effective rate was "closer to 15%" (than the 14% previously estimated), he must have had a lot of deductions.
Perhaps someone who knows tax law can explain to me how the AMT doesn't kick in. My understanding is that there are limited things Romney can take deductions for in order to avoid AMT rates.
scooter on January 17, 2012 1:12 PM:
Hmmm.... $360k per year is about the 99th percentile. I guess Mitt thinks those 1 percenters are just scraping by...
Ron Byers on January 17, 2012 1:15 PM:
Danp
The alternative is that he made a whole pile of money more than 360K. The 360K would have been taxed as ordinary income, but what if he made $30,000,000 in capital gains? The higher tax rate paid on the 360K would have been swallowed up by comparison. The net result would have been close to, but not exactly 15%.
I think there is some off shore money in the mix as well. He sure doesn't want us to know he is hiding his money in the Caymans.
T-Rex on January 17, 2012 1:18 PM:
Goterpsgo: Actually, Newt Gingrich did use the term "elite" just last night. He said to Juan Williams “Only elites despise earning money.” He was referring to those nasty old-fashioned child labor laws that prohibit public schools from hiring poor students to do menial labor at $1 an hour, as opposed to those greedy unionized adult janitors who get a living wage for it. But his statement is truer than he realized. Romney et. al. have no problem at all with putting people out of work, and despise those who make a fuss about wanting to earn a living.
Hedda Peraz on January 17, 2012 1:26 PM:
So much envy!
You poor souls could be just as rich at Williard, if only you made the effort.
Tell the truth: Did you buy a PowerBall ticket today, or spend the morning whining about class warfare?
Roddy McCorley on January 17, 2012 1:26 PM:
Or to put it another way for Romney "not very much money" is the cost of a house. In some parts of the country, it's the cost of two houses.
CDW on January 17, 2012 1:31 PM:
He had $300,000 in speaker fees according to Ed Schultz on the radio this morning. So go figure.
bushworstpresidentever on January 17, 2012 1:32 PM:
So, for Romney, an amount of income -- $362k -- that standing by itself would place him in the top 1% of federal income tax returns, is "not very much" money. He is so tone deaf as to render me speechless.
Gretchen on January 17, 2012 1:36 PM:
Yes, that $360,000 wouldn't buy two houses like mine, but it would come pretty close. I'd take it.
MarkJ on January 17, 2012 1:54 PM:
When he says the majority of his income comes from capital gains, it should be pointed out that the "capital" came from people who aren't him. Most of Bain's capital comes from other investors, but the income he earned (and still earns because they're still paying him) from those investments of other peoples' money are treated as capital gains rather than earned income. Basically, it's no-risk all reward for him and he still gets taxed at a lower rate.
He probably doesn't want people to know how much he's still getting from Bain risk free and paying a 15 percent tax rate on. I have no doubt he has considerable personal investments as well, but he got most of it not from creating value using his own capital - he just leeched off others' capital.
Sgt. Gym Bunny on January 17, 2012 1:58 PM:
If $360,000 is pocket change from between the cushions, I'm envious of any one who sits in a chair his rich ass has recently warmed. I bet he shits gold bricks when he sits on his platinum-plated potty.
Joe on January 17, 2012 2:01 PM:
I'm sure the low rate is a major issue but is that really it? I would think if it's just a low rate he would have released early to avoid protracted questions. I bet he took some pretty big payments in the 1990s that made some of the common-but-slimey tax shelter options of that era look pretty tempting.
I suspect that Romney at least considered some of the synthetic debt swaps and offsetting foreign exchange games of the time that had silly names like "BOSS" and "Son of BOSS." It would look awful if he had used later-discredited fake transactions to turn ordinary income into capital gains income or to create fake offsetting capital losses.
dalloway on January 17, 2012 2:03 PM:
Call me crazy, but I don't think it's the 15% rate he's worried about -- it's the tax dodges only available to the super-rich like Mitt. Don't forget that 15% is where the cap gains tax starts, not where it ends up once you thread it through all those loopholes. I think he's reluctant to release his returns because he probably pays very close to no tax at all!
beejeez on January 17, 2012 2:22 PM:
You know, Thurston Howell was pretty lovable for years as a castaway. I for one favor seeing if it works for the Mittster.
bob h on January 17, 2012 2:25 PM:
Romney says the rate is "probably" near 15%, but remember that is the capital gains number before deductions on many houses, major donations to the Mormons, whatever clever tax avoidance schemes his accountants have come up with, etc. He's being evasive here; the final effective number is probably in single digits if greater than zero.
(Does God love us enough to have Romney on the IRS list of those Americans with money in Switzerland and elsewhere overseas?)
anniecat on January 17, 2012 2:25 PM:
I've got another theory about why Romney won't release his tax returns. I bet that except for his tithing to the Mormons, which is close to mandatory in that church, Romney has made ZERO donations to charity and has suddenly realized that would be embarrassing.
Josef K on January 17, 2012 2:32 PM:
Isn't Willard hiding a lot of his money in the Caymans? Or is it in Zuirich?
tamiasmin on January 17, 2012 2:46 PM:
I wonder what sort of beings would pay Mitt Romney $41,000+ to speak to them.
I guess if they really like being annoyed and would go a couple of hundred to hear chalk screeching on a blackboard; a thousand, say, to listen to a truck's backup signal; and maybe five grand to hear their neighbor's radio banging on at midnight, then the mystery is solved. Romney's ability to annoy is more semantic than acoustic, of course, and is therefore of higher value.
Kane on January 17, 2012 2:58 PM:
He rails against the very government that has provided the foundation and structure for him to accumulate his massive wealth, and he mocks the very notion of shared sacrifice even though he has gained considerably from the shared sacrifice of others.
It is not his wealth that is offensive, it is his greed.
schtick on January 17, 2012 3:14 PM:
He's made all kinds of money right along and can't buy a vehicle that's big enough for his luggage and his dog?
JM917 on January 17, 2012 3:21 PM:
In addition to making Willard the archetypal Mr. One-Percent, Romney's IRS returns are also certain to show huge donations to the Mormon Church, all written off as charitable deductions. As everyone knows, the LDS expects a minimum tithe of 10%, and more from grand panjandrums like the Romney family.
I hope that the lesson will not be lost on the voting public that one reason why so many Mormons are right-wing Republicans, eager for deep discounts on their tax bills, is that they need these discounts in order to afford their own compulsory tithing.
Moreover, the LDS maintains a pretty generous safety net for the faithful should they ever lose a job, get sick or injured, or otherwise need a helping hand. (And of course the threat of losing this charity gives the church's bigwigs powerful leverage over the faithful--as when Bishop Romney once told an LDS woman in Massachusetts who wanted an abortion that she was "un-Mormon.") Of course, LDS charity is only for the faithful. "Gentiles" who need unemployment, food stamps, Medicaid, and other such "welfare" are simply freeloaders.