What About Mitt’s Tax Returns?

Annoying billionaire Warren Buffett can retain his moral superiority even while paying a lower tax rate than his secretary.

He can do this because he professes himself sorry, sorry, sorry and, moreover, Mr. Buffett is calling for tax hikes on the very wealthy, which endears him to the Obama administration and other class warriors. He could just quietly make a contribution to the treasury, of course. But that's not Mr. Buffett.

Mitt Romney, on the other hand, who probably currently pays the same tax rate, won't get off so easily as Mr. Buffett. Romney knows this and that is why he looked like he'd seen a ghost when Newt Gingrich went after him about making public his tax returns at the last debate.

Presidential candidates have released their tax returns since the 1970s. It is voluntary, but it would probably be very difficult for Romney to avoid doing this, especially in the current atmosphere.

Sure, we need to know if our presidential candidates are honest, and that includes paying their taxes. Presumably, they would be in trouble with the IRS if they weren’t doing this. So why do we need the tax returns? Well, really, we don’t. I was halfway hoping Romney would be gutsy enough to say, “Hell, no I’m not releasing my tax returns” when Newt got frisky. Of course, he can’t do that—he’ll end up releasing the returns.

But it is unfortunate that a Republican, supposedly a member of a party that doesn't support higher taxes, is going after Romney’s tax returns. As Jonathan Tobin notes:

Gingrich may think he has embarrassed Romney by harping on the release of his tax returns since the implication of the demand is that his rival is either hiding something or is not paying his fair share.

Since the former is clearly not the case, it is the latter point upon which Democrats have seized today after Romney owned up to having paid a rate in the vicinity of 15 percent of his income. They have gleefully sought to use this revelation as proof of the need to raise taxes on the wealthy.

But the question today for Gingrich is why, if Republicans have uniformly opposed raising tax rates, should GOP primary voters think ill of Romney for this reason? If Gingrich is implying via means of this issue that Romney should be paying more, is he telling us he supports raising taxes? If not, what point is he trying to make other than to appeal to South Carolinians to vote against Romney because he’s rich?

If Romney is the nominee, as is likely, the Democrats are going to portray him as a rich person who isn’t paying his “fair share.” In a way, a Romney candidacy is a good chance for the GOP to talk about the effect of taxes on the economy, how investment income already has been taxed at least once, making the 15 percent tax fair, and the need for lower taxes in general. Somebody better start prepping Romney to do this.

But maybe the best thing Romney could do is take a leaf from his father’s book. What did George Romney, also a very rich man, though not as rich as his son, do about his tax returns when he was seeking the GOP nomination in 1967? CNN Money has posted a fascinating piece by Joseph J. Thorndike, a contributing editor at Tax Analysts, on how the elder Romney handled this: It seems that Romney pere originally resisted releasing his tax returns. But, as he realized he had to do so, the senior Romney came up with a better idea: release ‘em all.

Well, maybe not all of them, but Romney released all his tax returns for the previous  12 years, giving the public a look at how much he had paid in taxes over that period. His tax rate varied from year to year. In 1961, it was 45.8 percent , though in 1966 it hit a low of 16.5 percent. The average rate for the 12 years was 37 percent.

This told the public a story about how tax rates work. But almost as interesting, the Romney returns showed how generous George and Lenore Romney had been:

Over the 12-year period covered by the returns, George and Lenore Romney gave away 23% of their income to charity, including 19% to the Mormon church.

"One year, in 1960, they carefully gave away all but $389.59 of [George's] salary and bonus, $173,125," the magazine noted with apparent awe. Of course, the Romney's still collected $487,202.68 in dividends, interest and capital gains that year, so they weren't in much danger of starving. But still, the gifts were impressive.

Thorndike urges Mitt to follow in his father’s footsteps:

Romney Jr. should take a lesson from Romney Sr. and take the risk of public disclosure. He should challenge the Buffett rule head-on, offering up his own Romney rule in honor of his father: "No presidential candidate should be afraid to confront the electorate with the truth, no matter how uncomfortable it might be for either of them."

This is going to be an educational presidential election, especially if Romney is the Republican nominee. Romney will have to become a spokesman for the Republican values which, I would argue, he embodies in his career. The public just might be willing to listen, especially when we are seeing how the "entitlement society" (thank you, Newt!) works.

Indeed, it is a hopeful sign that Newt Gingrich’s attack on Romney for his work at Bain Capital seems to have gone over like a lead balloon.

Perhaps the electorate will also be able to see through it when President Obama’s campaign starts saying Romney hasn’t paid his “fair share” if they see how much he undoubtedly has paid over the years.