Republican front-runner Mitt Romney is facing increasing pressure from his opponents to release his tax returns, which presidential candidates have done for decades. It’s a fight that few outside of Beltway’s chattering class care much about and will yield few insights into his fiscal policies, which some have found lacking.
The issue came up during Monday’s debate in South Carolina, and the former Massachusetts Governor said he might release them around tax time in April. The tax forms will show that Romney is wealthy and that he gets most of his money from income from investments, two facts that will surprise no one with rudimentary reading skills. Romney’s stalling over the issue is silly.
It’s a pity that few in the media are paying attention to how most Americans would fare economically under a President Romney.
Like his rivals, Romney argues that government is too big and taxes are too high. He wants to eliminate the estate tax – which Republicans have branded as the “death tax.” Individuals would see no changes to the rates that they pay on personal income interest, dividends, and capital gains. Taxpayers with Adjusted Gross Income below $200,000 would pay no taxes on interest, dividends, and capital gains.
The Tax Foundation gives Romney’s plan a “C -” grade, the second lowest of any candidate except Rick Santorum. It argues that the $200,000 cut off is arbitrary and will “do practically nothing to incent investment, since the vast majority of individuals who pay capital gains and dividends taxes make more than $200,000.”
Along with other Republicans, Romney also proposes slashing the corporate tax rate, which is among the highest in the world (though most firms don’t pay it), from 35% to 25%. He also advocates a “tax holiday” that would allow businesses to repatriate profits that are currently overseas. The Tax Policy Center notes the plan lacks specifics such as whether these profits would face any tax. He also would permanently repeal the Bush Tax Cuts.
About three-fourths of taxpayers would see their taxes reduced by an average of more than $4,700 compared with the current baseline. About 13 percent of tax units – which includes individuals and families – would see their 2015 taxes go up an “an average of more than $900 while 42 percent would get tax cuts averaging nearly $2,900,” according to TPC. Rich people would do great, even as tax revenue would be slashed by $600 billion compared with current law.
“Households making more than $1 million would get an average tax cut of almost $300,000, largely because, as owners of capital, they’d receive the bulk of the benefit of Romney’s very generous corporate tax reductions,” writes the TPC’ s Howard Gleckman in a blog post. “While those making $1 million-plus pay about 20 percent of all federal taxes, they’d receive more than 28 percent of Romney’s tax cuts.”
The controversy over Romney’s dithering over releasing his tax returns will evaporate into cyberspace as soon as he gets around to doing it. His tax policies could have ramifications that could last decades.
The opinions contained in this column are solely those of the writer.
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