Romney Refuses to Release Tax Return


This is a very interesting development. Mitt Romney has said that he does not intend to release his tax returns publicly even if he wins the Republican nomination, as all candidates have done for a very long time.

Mr. Romney made the statement in an interview with MSNBC on Wednesday, but the network did not show that part of the interview. Mr. Romney, a multimillionaire who made his fortune running a private equity firm, was asked whether he planned to release his tax return.

“I doubt it,” Mr. Romney said, according to a transcript of the interview provided by NBC News. “I will provide all the financial info, which is an extraordinary pile of documents which show investments and so forth.”

“But you won’t do the tax returns?” asked Chuck Todd, host of “The Daily Rundown.”

“I don’t intend to release the tax returns. I don’t,” Mr. Romney responded…

Throughout his political career, Mr. Romney has refused to release his personal tax returns. During his 1994 Senate campaign in Massachusetts, Mr. Romney challenged the incumbent, Edward M. Kennedy, a Democrat, to release his tax returns — though Mr. Romney did not release his own.

Mr. Todd asked Mr. Romney about that during the interview on Wednesday.

“I never say never,” Mr. Romney said, but added, “I don’t intend to do so.”

The reason for this seems obvious. Nearly all his income likely comes from investments, which means they get taxed at the 15% rate rather than at the top rate of 35%. For a man worth as much as $250 million, the fact that he pays a lower tax rate than a typical working person in this country would be a big problem for his campaign. But I suspect it will be anyway.

Comments

  1. chilidog99 says

    I wonder what the birthers who are always squaking about Obama’s kindergarten records will say to this?

    Who am I kidding, they won’t say anything, of course.

    What I would like to know is how much does Willard tithe to the LDS and / or donate to charity?

  2. Michael Heath says

    I happen to support much lower if not the total eradication of taxes on capital. I think it’s in the best interest of all American workers and our economic growth rates in an increasingly competitive global economy. I also think the effective tax rate on nearly all Americans is too low, but especially our richest individuals (let’s not forget W. significantly and idiotically cut effective income tax rates on the bottom income quintiles as well).

    Given I currently prefer Barack Obama beating Mitt Romney if he’s the nominee, I simultaneously hope the president plays to win by exploiting this weakness in Romney while preemptively cringing that it will be even harder to cut taxes on capital gains and replacing that lost revenue with some combination of: higher marginal income tax rates, estate taxes, dividend taxes, luxury taxes, or a VAT/consumption tax.

  3. says

    Michael Heath:

    I can’t argue with you about how much capital should be taxed. The history of tax policy over the last 50 years does not augur a good outome for giving the rich another way to hide money.

  4. D. C. Sessions says

    I happen to support much lower if not the total eradication of taxes on capital. I think it’s in the best interest of all American workers and our economic growth rates in an increasingly competitive global economy.

    Is this just a matter of sentiment or is it based on the actual research on the economic outcomes of capital and investment taxation?

  5. says

    I happen to support much lower if not the total eradication of taxes on capital.

    I also think the effective tax rate on nearly all Americans is too low, but especially our richest individuals.

    Given how much of the richest individuals’ income is from capital gains these days, how do you reconcile these two seemingly contradictory positions?

  6. Michael Heath says

    tacitus:

    Given how much of the richest individuals’ income is from capital gains these days, how do you reconcile these two seemingly contradictory positions?

    I named them prior, on the very few who earn most of their cash flow on capital gains you could capture those taxes in higher estate taxes, luxury taxes, selected VAT/consumption taxes, and one other item: There are some relatively recent loopholes which have allowed some earnings to be claimed as capital gains when it’s really money earned from actively working and should therefore be taxed as income. Especially since we get the full deductions on expenses and depreciation against these assets (as we should since that’s consumed cash).

    This avoidance of income is especially true with hedge fund managers but it’s also true in other industries like real estate development and other sectors where people are focusing their work-day energies in turning fixed assets into higher-valued assets and then selling – that should be taxed as income rather than capital gains. Essentially, allow passive investing to be taxed at lower rates but active investing should taxed as income. And as noted earlier, I support higher marginal rates and higher effective rates assuming we keep taxing income, which I oppose in general though if we keep taxing it I support the Democrats’ approach. (Studies focused on optimal economic growth rates favor taxing consumption rather than income, which we can do and not lose our progressive bias.)

    Also if you look at effective rates and median effective rates at the top quintile and even higher percentiles at the top quintiles you’ll find liberals exaggerate the number of people at the top paying lower effective rates than the middle class. Which is why they always use anecdotal evidence like Warren Buffet and hedge fund managers rather than representative data. Here’s some tables that don’t completely validate this but help: http://www.capitalgainsandgames.com/blog/bruce-bartlett/1525/how-clean-tax-code

    What you want to achieve is to increase investment here vs. other countries along with increasing liquidity here in order to more easily move capital into emerging and growth markets. We should want this because we need competitive advantages relative to other countries who have cheaper labor. I.e., this all assumes we want optimal economic growth in an environment which creates a far healthier labor market and moves us away from a carbon-based economy. Historical data regarding the relationship between business cycles and the labor market no longer apply so we can’t assume past practices will provide similar results as the past. The fact is that each business down cycle has resulted in a far weaker labor recovery than the past: http://andrewsullivan.thedailybeast.com/2011/11/a-glacial-recovery.html

  7. KG says

    I named them prior, on the very few who earn most of their cash flow on capital gains you could capture those taxes in higher estate taxes, luxury taxes, selected VAT/consumption taxes, and one other item: There are some relatively recent loopholes which have allowed some earnings to be claimed as capital gains when it’s really money earned from actively working and should therefore be taxed as income. – Michael Heath

    Consumption taxes hit the poor relatively harder than the rich, and I can’t see luxury taxes doing much – if nothing else, the rich can buy and use much of their luxury consumption abroad. It’s hard to share your confidence that the rich won’t find ways around estate taxes, and new loopholes for turning earned income into capital gains, if you make it even more advantageous to do so.

    What you want to achieve is to increase investment here vs. other countries along with increasing liquidity here in order to more easily move capital into emerging and growth markets

    The term “emerging markets” is generally used (in my experience at least) to mean countires such as China and India. If you meant that, it seems inconsistent with the first part of the sentence.

    We should want this because we need competitive advantages relative to other countries who have cheaper labor. I.e., this all assumes we want optimal economic growth in an environment which creates a far healthier labor market and moves us away from a carbon-based economy.

    You haven’t explained how not taxing capital gains would achieve these ends.

  8. Eric Ressner says

    Since this thread has already been jacked away from the Romney tax return issue …

    I’m going to pile on Michael Heath with KG. There is something inherently unfair about treating one kind of income preferentially, especially when the favored kind of income is overwhelmingly entering already overstuffed wallets. (Perceived) fairness in the taxation system has a very high inherent value, so any features that decrease (perceived) fairness had better have objectively strong compensating benefits.

    If this is all about keeping more investment dollars in the good old USofA, that will only happen if the risk-adjusted return of domestic equities is higher than that of foreign equities. If it is, not only will American investors shift into domestic investments, but foreign investors will send us their cash, too. Otherwise, fuggedaboutit.

    And there’s this: domestic and foreign capital gains are taxed at the same rate. So how will reducing that rate increase investment in domestic equities?

    And BTW, if investment capital is so sacred, why aren’t the capital gains I earn in my 401(k) account taxed as ordinary income? It sure feels like the game is rigged.

    Since I am not an economist, just a struggling retiree, I’m willing to be schooled on the finer points. To that end, I’d like to echo D. C. Sessions’ question @ 4:

    Is this just a matter of sentiment or is it based on the actual research on the economic outcomes of capital and investment taxation?

    Michael?

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