Last night at the primary debate in South Carolina, Mitt Romney, under duress, finally committed to eventually releasing his tax returns. Almost. Romney, clearly struggling to walk a tightrope he had strung for himself, said he wasn’t “opposed to doing that,” but “time will tell” and he’ll “keep that open,” but also, it’s “probably what I would do.” It was uncomfortable to watch.
Why Romney is so worried about releasing his tax returns might not be immediately obvious. Is there anyone in the world who doesn’t already know that he’s really, really rich? Maybe one or two people — Japanese soldiers hiding out on isolated Pacific islands since World War II, unaware that hostilities ceased long ago. But that’s it.
More likely, it’s because Romney’s tax returns would show that, despite a net worth in the hundreds of millions, he only pays a 15 percent tax rate on his income, because like many of America’s wealthiest people, his income comes from investments. That’s the same 15 percent rate that applies to someone earning much less money in an actual job, such as child janitoring, for example.
Earlier today, resigned to that fact that this information would be released at some point, Romney finally decided to discuss his tax situation with the press:
Mitt Romney said Tuesday he pays roughly a 15% effective tax rate on his income — an acknowledgment that the multi-millionaire pays a smaller percentage of taxes on his income than many middle-income Americans.
“It’s probably closer to the 15 percent rate than anything,” Romney told reporters when asked about his effective tax rate. “The last ten years my income comes overwhelmingly from investments made in the past rather than ordinary income or rather than earned annual income.”
Newt Gingrich, looking for traction wherever he can find it, tried to mock Romney’s admission:
Talking to reporters outside a speech in Columbia, Newt Gingrich responded to Mitt Romney’s claim that he paid an effective 15 percent income tax rate.
“First, I think he ought to release his taxes so we can find out whether it’s actually 15 percent. And second, I think we ought to rename our flat tax. We have a 15 percent flat tax. This would be the Mitt Romney flat tax, and then all Americans could then pay the rate Romney paid. That would be terrific.
“Since my flat tax is 15 percent, I’m thrilled at the idea, I assume this afternoon he will endorse my flat tax proposal and have every American pay the rate he paid. I think that would be terrific.”
Despite his obvious glee, it will be tough for Gingrich to make Romney’s taxes an issue — under Gingrich’s tax plan, which eliminates capital gains taxes, Romney would actually pay nothing, as Romney himself pointed out today:
“Very high-income people of this country pay roughly 15 percent of taxes if their resources are coming from investments, and under their plan it would go to zero,” said Romney. “I just don’t think that’s the right course.”
Do any of these tax plans really matter, ultimately? To be implemented, they would have to get through Congress, a legislative body that no longer passes legislation of any size or importance, much less sweeping reforms to the tax system. We might as well be arguing over how much to tax the sale of unicorns.