Saturday, September 22, 2012

Romney Tax Returns

My computer destroyed itself a few days ago so I was unable to blog until now. 
Romney's release of his tax returns was long overdue - I never understood his hesitation, as it seemed obvious that at some point the information would be released. Anyway... The media are understandably focussing on the fact that Romney paid an effective rax rate of 14.1% in 2011. However, there are some other considerations that must be noted. First, the IRS has stated that there is no evidence of any 'aggressive tax planning' on the part of Romney. Second, over the years, the Romneys have made significant donations to charity - they haven't simply horded their wealth in an underground cellar. Third, President Obama paid an effective 20.5% rate in 2011 - the difference between the two candidates tax bills is not significant. In addition, where Romney's income largely came via Capital Gains, Obama's was the result of direct income from his book sales. Capital Gains are deliberately taxed at lower levels in order to induce investment in the economy. Though he probably thinks otherwise, Obama's books do not stimulate economic activity.

Fourth, the entire premise of Romney's tax plan (largely developed by Paul Ryan) is to reduce rates, while also simultaneously closing the loopholes which allow taxpayers to substantially reduce their tax payments to the Federal Government. In essence - reduce rates and reduce avoidance, in order to increase revenue but reduce tax distortions on the economy. In contrast, President Obama wants to reinforce the personal income tax code with more deductions and higher rates. This election should be about the bold discussion of compelling alternatives. Sadly, President Obama's economic policies are exceptionally weak
PS - Paul Ryan earns the least out of all 4 candidates.


  1. Writing in my (future) persona as Comms man, shift the focus to play to your strengths. Something like…

    'My tax returns are not the issue, The President's tax returns are the issue is the tax returns of millions of ordinary Americans who pay too much tax and make too many hard choices. The issue is about protecting families who have to choose between food, or fuel. The issue is easing the burden and reducing the taxes and on working Americans, however they earn their wealth.'

    How's that? The issue isn't about Romney anymore, or tax returns of one, but the plight of many and how 'your' side will make most people better off?…


  2. Correction

    *'The President's tax returns are not the issue, the issue is the returns of millions...'