July 22, 2012 by David K. Sutton
Mitt Romney Tax Return Scrutiny Calls Attention To Progressive Taxation
It’s quite possible the real reason Mitt Romney does not want to release more years of tax returns is that he knows it will only serve to put a sharper focus on progressive taxation in the United States. In fact he and his wife Ann have all but said that. They haven’t spelled out the specifics but they have said they won’t release more returns because it will result in more criticism.
There was a time when our society was much more equal in terms of wealth and income and this was due in no small part to a much more aggressive federal income tax policy after the Great Depression and the New Deal. When George Romney (Mitt Romney’s father) ran for president in 1968 the top marginal income tax rate was around 90%. Oh, and by the way, George Romney released 12 years of tax returns for his presidential run. Nobody actually paid 90% of all their income in taxes, of course, and that has partly to do with deductions and other tax loopholes but it has mostly to do with how marginal tax rates work: you only pay that rate on income earned in that bracket. Or in other words, all income below that tax bracket is taxed at the lower marginal tax rates.
from Up with Chris Hayes on MSNBC, July 22, 2012:
What’s most fascinating about this episode to me isn’t what we don’t know about Mitt Romney’s tax returns, but instead, what we do know about George Romney’s [tax returns]. After George Romney handed over his tax returns to Look Magazine, they published a summary…and sitting here in 2012 in the midst of our own tax debates, you can’t help but look over the details and think “Holy crap that dude paid a lot of taxes!”
Over the 12 years George Romney had an adjusted annual gross income of just under $250,000, which is nearly $2 million in today’s money. And he paid an annual average effective rate of 37%. Compare that to what Mitt Romney paid, according to his two returns, an average effective rate of 15%. That’s a very big difference. How would you like to have your federal income taxes dropped 22 percentage points? What’s remarkable is that even though Mitt Romney, with an average annual income over the past two years of over $22 million, is 11.5 times richer than his dad was (adjusted for inflation), they’re both in the top .01% in the income distribution of their respective times. Think of what that means about the growth of incomes at the top over the intervening years. And despite how much richer Mitt Romney is than his father, he pays less than half as much of his income in taxes.
The reason that George Romney paid so much more in taxes isn’t because George Romney was a saint and his son is a lout, it’s because George Romney happened to be a rich man during a period in which this country was committed to robust progressive taxation.
It’s not about punishing success. It’s not about taking from the rich and giving to the poor. It’s about a more equal society. There is no case to be made that greater income and wealth inequality will lead to a healthier society and I can’t imagine anybody would even try to make that case. But there are plenty of people who would do nothing to remedy this growing problem, and Mitt Romney is one of them.