Mitt Romney is a very wealthy man — his campaign puts the former venture capitalist's fortune at between $190 million and $250 million — who pays a relatively low tax rate. On Tuesday, after fending off months of questions about his taxes, Romney finally disclosed that the amount he pays in federal taxes is "probably closer to the 15 percent rate than anything." The nominal top tax rate is 35 percent, and households earning $50,000 to $75,000 a year pay about 16.5 percent. Romney is able to claim the 15 percent rate for capital gains (investment income) because much of his income comes from "carried interest" — his share of the profits that his old private equity firm, Bain Capital, earns from managing other people's money. Romney also earns money from speaking fees — though he characterized the six-digit amount as "not very much." The GOP presidential frontrunner says he'll release his 2011 tax returns in April. Will this "embarrassing" tax confession hurt Romney?
This is devastating for Romney: "The politics of this are awful for the GOP frontrunner," says Steve Benen at Washington Monthly. While middle-class families struggle through a tough recession, most are paying a higher tax rate than the multi-millionaire "who got rich laying people off." Oh, and that "not very much" Romney earned in speaking fees? More than $362,000 last year alone. "For a candidate already accused of being an out-of-touch elitist... this is clearly another 'uh oh' moment."
"Quote of the day"
But the tax code isn't Mitt's fault: I don't get the "obsession with Mitt Romney's tax returns," says Tina Korbe at Hot Air. Yes, he's rich. But he's not a tax evader, and "honestly, it's highly rational of him — and of any member of the ultra-rich — to obey the incentives created by the tax code." It's not like he invented his own loophole. Republicans know that Romney is a "flawed candidate," but now that he's ripped this tax band-aid off, can we at least "return to the real issues"?
"Romney says he 'probably' pays about 15 percent in taxes"
If he's smart, Romney can turn this to his advantage: The cat is already out of the bag, says The Wall Street Journal in an editorial, and whatever Romney does now, Team Obama will use Mitt's tax break to hammer the Republican as "a morally obtuse fat cat who doesn't understand the problems of average Americans." If Romney doesn't want to spend the next 11 months defending his 15 percent rate, he should seize this moment to "make the moral and practical case for lower rates and fewer loopholes" for everyone.
"Mitt Romney's 15 percent"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- 13 Urban Outfitters controversies
- 6 things the happiest families all have in common
- 10 things you need to know today: September 16, 2014
- The science of sex: 4 harsh truths about dating and mating
- Russia is stealthily threatening America with nuclear war
- 43 TV shows to watch in 2014
- Can we lead spiritually fulfilling lives without religion?
- What political elites don't understand about Scotland's push for independence
- Is 'feminism' just another word for 'liberalism'?
- This is how the U.S. thinks China could invade Taiwan
Subscribe to the Week