Intro: "Just about what we expected. He really needs to provide earlier years, if only to clear up suspicions that he began sanitizing his portfolio in preparation for his presidential run."

Portrait, New York Times columnist Paul Krugman, 06/15/09. (photo: Fred R. Conrad/NYT)

Romney's Taxes

By Paul Krugman, The New York Times

25 January 12

ust about what we expected. He really needs to provide earlier years, if only to clear up suspicions that he began sanitizing his portfolio in preparation for his presidential run.

The right-wing apologetics now focus on the claim that Romney's taxes aren't really low, because we should impute the taxes that corporations effectively paid on his behalf. But there are at least two things wrong with this argument.

First, $13 million of the total was carried interest, which gets taxed like capital gains but is really just commissions that receive special treatment for no good reason. No profits taxes were paid on that income; right there, a minimally defensible tax code would have levied $2.6 million more in taxes on Romney.

Second, just the other day the usual suspects were calling for big cuts in corporate taxes, arguing that these taxes don't really fall on stockholders, they fall mainly on workers and consumers. Now, suddenly, the taxes fall on stockholders after all. Interesting.

Meanwhile, the Romney campaign is signalling that it's going to try to spin this as "he pays lots of taxes"! How stupid do they think we are? Actually, don't answer that.

Again, the point here is not that Romney did something wrong by paying the low rates current tax law lavishes on people like him. It is, instead, that in an election campaign that will be in part about issues of inequality, the likely GOP candidate is a living, breathing, coupon-clipping example of how favorable our system is to the very rich; and he also happens to be advocating policies that would greatly benefit people like him, while hurting the poor and the middle class.

PS: Yes, my tax rate is a lot higher than Romney's. And I support policies that would raise it further.

Comments

We are concerned about a recent drift towards vitriol in the RSN Reader comments section. There is a fine line between moderation and censorship. No one likes a harsh or confrontational forum atmosphere. At the same time everyone wants to be able to express themselves freely. We'll start by encouraging good judgment. If that doesn't work we'll have to ramp up the moderation.

General guidelines: Avoid personal attacks on other forum members; Avoid remarks that are ethnically derogatory; Do not advocate violence, or any illegal activity.

Remember that making the world better begins with responsible action.

- The RSN Team

+62 # artful 2012-01-25 08:55

Yes this truly is the central issue in this election.

+13 # soularddave 2012-01-25 18:46

But is it, really? Were payments to lobbyists and campaign contributions deducted from earnings before coming up with "taxable" income?

Those payments would have been for the purpose of increasing control over the system, and probably mot taxed.

I think the central issue is *who controls government*.

+8 # gdp1 2012-01-26 09:22

...the CORPORATIONS CONTROL IT....don't think so? Open your eyes...

+37 # bugbuster 2012-01-25 09:21

Nobody likes taxes. Not liking taxes is a pretty gratuitous political platform, but it's all the GOP has, so they're sticking with it.

If my tax rates go up a bit and a few years later instead of hearing about the economy and people in distress we start hearing about angels-on-the-head-of-a-pin issues again like we did during the boom years, I'll know it's doing some good.

+52 # Nell H 2012-01-25 09:23

Our tax rates favor people who don't work. Isn't there something wrong with that?

+54 # Barbara K 2012-01-25 09:31

For Romney and his other millionaire friends who don't pay the proper taxes to the country who made them millionaires, is just plain UnAmerican. Just how much money is enough for these money grubbers anyway? $5 Million, $10 Million, $25 Million, a Billion or more? Shame on them. We know they didn't become millionaires by themselves. It is off the backs of the poor and middle class that made them wealthy. They can see how desperate people are right now. Do you see them investing in anything at all to give the once middle class and the poor a hand up? Of course not, they are the ones that made us that way.

NEVER VOTE REPUBLICAN !!

our future is at stake

+16 # MidwestTom 2012-01-25 09:34

The big question is how do we get Congress to raise the rates. Most of Congress, both Republicans and Democrats are millionaires, and almost all of them get a major portion of their funding from Wall Street. i would look for some kind of bill that raises the rates, but has some loopholes that allow them to not actually pay the higher rates. They all say that they are for a raise in rates, the Dems could have done it when we controlled everything, but they did nothing, and I doubt the Repbs will do anything substantial.

+22 # wsh 2012-01-25 11:43

"The big question is how do we get Congress to raise the rates."

Simple, start working to get a true progressive nominated to your district in 2014. Blue dogs Dem.s are one jot better than Rep.s in my eyes.

+14 # AndreM5 2012-01-25 09:37

Only one dispute: Romney has never "clipped a coupon" in his life, nor does he know what they are.

-73 # cypress72 2012-01-25 09:45

Last year the US Treasury collected millions of dollars from people who wanted to do something to pay down the debt, over and above what the tax code prescribed. I suggest you do the same or write your Congressmen and Senators and suggest that they pass meaningful tax reform. I'm sick and tired of people like you and Warren Buffett whinning about how they wish they could pay more. SEND A CHECK !!! I bet you won't until your rates go up.

+46 # MJnevetS 2012-01-25 13:14

Quoting

I'm sick and tired of people...about how they wish they could pay more. SEND A CHECK !!!

No one is saying they wish they could pay more of their money in taxes, NO ONE. You are foolish to suggest otherwise. The complaint is that when certain persons or groups are allowed to pay LESS that their fair share of taxes, it must be made up somewhere else. Traditionally, that has meant an increased tax burden on the middle class along with a reduction of services and of the social safety net to the middle class, elderly on fixed income and the working poor. The lie is that the country can't afford to keep up its infrastructure and maintain a social safety net. The truth is that the country can afford those things [they are integral to any functioning society]; we just can't afford them while pursuing unfunded wars for 8 years along with tax breaks to the wealthy for that same period of time. Do you think that anyone paying a voluntary extra $10,000.00 in taxes will make up for the over $2.0 trillion cost of those cuts (As calculated by the Congressional Joint Committee on Taxation) These cuts also increased the U.S. Debt from $144.5 billion in 2001 to $962.0 billion in 2008; that fact led the same politicians who voted for the cuts to complain that our deficit is too high and we need to cut services. Please educate yourself before you make such comments.

+15 # historywriter 2012-01-25 17:26

This is not a useful action. Warren Buffet has talked about why he does not voluntarily add more to his taxes: he can do more with his money targeting particular groups.
Taxes are one of those things that a society does together to maintain and strengthen our people by providing things that no single person, or even a group of people like the willing rich, can do.
Funny, I don't recall Warren "whining." He was just stating facts.

+32 # juliajayne 2012-01-25 10:10

Mr. Krugman, your last two sentences make YOU a true patriot. Thank you for getting it when so many in your tax bracket don't see the connection of a shared burden to what's in the best interest of this country they claim to love, but not so much as to put their "grip" (money) where their lip is, so to speak. Ha!

+47 # Buddha 2012-01-25 10:28

We've known for ages that the tax rates the SuperRich pay are an outrage. More interesting is how Romney has his treasure in off-shore havens like the Caymans and Switzerland. Tell me again how his low-taxed wealth is "creating jobs" as they sit in the Caymans and a numbered Swiss account?

+21 # Texas Aggie 2012-01-25 13:22

Your observation is why taxing the rich during a recession will have no negative effect on the economy. It's why we need to raise taxes on the uberwealthy now, not in two or three years.

+28 # Doctoretty 2012-01-25 10:29

As usual, you explain things so even economic dunces like me can understand them! Thanks!

+12 # LiberalLibertarian 2012-01-25 12:18

Use Occam's razor. If it becomes convoluted and hard to understand that is probably because it is forced.

Professor Krugman is not forcing his logic through an ideological prism.

+2 # elmont 2012-01-27 16:29

[quote name="LiberalLibertar ian"]Use Occam's razor. If it becomes convoluted and hard to understand that is probably because it is forced.

I approve!! Occam's razor (sometimes called Ockham's razor) is one of the most beautiful and meaningful scientific (or philosophical) concepts ever devised. It applies here, as you say.

-51 # Robt Eagle 2012-01-25 10:36

If you were HARMED by Romney's taxes, please do not vote for him.

+24 # LiberalLibertarian 2012-01-25 12:15

fair enough.

I won't. If he paid just double (~29%) then the government would have had millions of dollars more. State Colleges could get additional money that would help reduce the costs of attending college. With that money the State College in NH that my son is attending would be able to grant him the optional New England in-state tuition. My son would then be entering the workforce with less debt over his head.

Dear former Governor Romney as my former Governor please submit to my son the difference for four years of State College tuition in NH vs the amount he would have paid in MA.
My Thanks go to Robt Eagle for suggested this idiotic idea. LL

+22 # Billy Bob 2012-01-25 13:07

You're right! NONE OF US should vote for him. As a nation, we HAVE been harmed by his lack of taxes, as well as those of everyone else in the top 0.001% of the population.

-72 # Robt Eagle 2012-01-25 10:40

Why not LOWER EVERYONE"S TAX RATE? Then everyone would pay their fair share what ever they earned?

+39 # Todd Williams 2012-01-25 11:35

Come on, man, you know that's a bunch of crap. The wealthy do not pay their fair share. Why would you want to lower their tax rate? And as for middle class people, we already pay our fair share. I'm not looking for tax relief, I'm proud to pay my fair share. And poor people pay very little in income tax. It's the fat cats like Romney that need to cough it up.

+25 # ABen 2012-01-25 11:58

Robt; this comment makes no sense, but I am getting used to that.

+16 # LiberalLibertarian 2012-01-25 12:23

Great idea!

And then we would have more taxes! What should we do with those riches? Buy more guns? Buy bigger guns?

Take care of People, make them whole, enrich their lives, give them the tools and the opportunities to succeed. Do that and do it first. Successful businesses will follow.

+17 # Texas Aggie 2012-01-25 13:26

Because then the safety net disappears and our infrastructure goes to blazes. That won't affect you and your kind because you'll just set up housekeeping in some country where people still understand the function of a government. But the 99% are pretty much stuck here.

+16 # historywriter 2012-01-25 17:29

Lower tax rates to what? To the point that government would be shrunk until you can drown it in the bathtub? Then what? I cannot envision a country with a government too weak to help the elderly and the sick and the poverty stricken, while providing huge amounts of money to the rich through tax breaks, deductions, outsourcing, offshore secret accounts, and the like.

+26 # in deo veritas 2012-01-25 10:42

Like the rest of the Repug clowns he is the embodiment of what is wrong with this country. In his defense, he is not an amoral sleaze like Newt Gangrene when it comes to infidelity and callous disregard for spousal life-threatening illnesses. He is not a defender of rape as is Santorum, who is part of the group that has raped the American people and the economy with the policies of the 1%. If any of these manage to slither their way to the White House the end is at hand.

+19 # LiberalLibertarian 2012-01-25 10:46

What I don't get is this baloney that the money earned on investments was already taxed? I get the concept that taxing investment returns is an incentive to reinvest the money. I don't understand why my salary, which I earn thanks to the investment I made in my education, using money that had already been taxed does not get the discount 15% rate.

The Republicans keep harping about how they want to simplify the tax system and eliminate Class Warfare. So maintaining two tax codes is simpler than applying the same rules to everyone no matter where the income derived?

The real kicker in the Romney tax returns is that he is able to get away with this discounted tax rate legally. As yet I have not heard of any accusations of illegal activity on his part. Imagine what the tax cheats among the 1% are stealing from us.

So money that was made from investments are taxed at a lower rate because they were already taxed? How the Hell did anyone calculate the future profits of an investment and tax it before the profit was claimed? I may be wrong, but the return on an investment is profit, right?

+20 # ABen 2012-01-25 10:50

But Paul, if we let the wealthy keep all their money and live lavish lifestyles, some of the cake crumbs will fall off the table for the rest of us. We need to keep bowing to the God of Capitalism, devoting our labor to more efficient production of widgets, and be happy with what we have. Why does it feel like my shorts are getting tighter?

+18 # DPM 2012-01-25 11:07

So...if we eliminate all corporate taxes and taxes on the very wealthy, will we be swimming in high paying jobs, in this country. Is that what these people are saying? I know that is what they are shooting for, on down the road.
I don't want to answer the question of, "How dumb do they think we are?", either, because, well. Look around. Scary, huh?

+38 # Susan W 2012-01-25 11:31

I think he could probably struggle through even if he paid taxes at 50%!

What is it about rich people that they have no concept of the word 'enough'? They seem to equate it with 'all'.

+28 # motamanx 2012-01-25 11:32

The last not rich guy to be elected was Clinton--and he balanced the budget and provided a surplus. So would Obama have, had not all the money been sucked out just as he took office.

+14 # wsh 2012-01-25 11:39

I think we got the reason (one of them, anyway) why Romney isn't producing his returns before last year from his supporter John Sununu. He said that we're gonna be surprised at how generous Romney was to charity.

I'm guessing that his strategists looked over his past returns during 2010 and told him he needed to do SOMETHING to make the next one look better, and the best he could do was give away a buttload of money...I wonder how much he DID give away...

P.S. I hear he makes $57,000 a day...A DAY!!!

+22 # GeeRob 2012-01-25 11:49

Any person running for office who chides the poor for not paying income tax while taking full advantage of the tax break for millionaires should be forced to work at McDonalds for a minimum of 5 years. That would be you, Mitt.

-9 # MidwestTom 2012-01-25 12:03

Again this site is not recording greens and reds the way that they are coming in. I clicked on one and then opposite number changed by 2. I clicked on another and head it change by four. It is really hard to monitor opinion if the like/dislikes are not honest.

**RSN MODERATOR NOTE ***

When you load a page, it tabulates the votes. When you vote on a comment, other people may have voted in the time it took to read the page/comments and thus reflects the new total. If you want to look at the vote totals before you vote, click refresh.

+8 # Texas Aggie 2012-01-25 13:30

It's because other people are clicking at the same time as you. Despite your pretensions to grandeur, other people are involved in this as much as you are.

+7 # Gord84 2012-01-25 12:16

I had a good friend in England who explained to me how he did not pay taxes on his foreign bank deposits. The countries (banks) in question did not report any interest earned if you withdrew the interest before the end of the fiscal year. That is probably why Romney's foreign investments show no money earned.

+18 # shortonfaith 2012-01-25 12:22

Romney paid 13.8% (or something) on the money he declared. What about the money he didn't declare? What about all the money he hides in other countries? If, he's hiding an equal amount of money as he's declaring, then he's really only paying 7.4%?

Either way it's BS, & our own congressional people sell us all out for every day that passes. I don't care if they do have 300 lobbyist for every congressman, stop selling away the farm! Any of our leaders who's been selling us out needs to be replaced. They really should step down on their own now, while they have a President who won't prosecute killers & thieves.

Then go about the business of getting the stolen money back. Do that by taxing them the same rate Eisenhower did. If any of them start to cry openly, have the IRS show up at their offices with warrants. Little country's & offshore islands that allow the mega wealthy to hide large sums, should be invaded. Do something good with the Military for a change. Make them start working for the money they get from the taxpayers? The military can work outside the borders of the US collecting US dollars stolen out of circulation by the Federal Reserve & all those multi-nationals, that use US muscle to open new markets on the backs of the 99%.

These white collar criminals have become so above the law & justice, they're actually running one of their cleanest looking thieves for President of the United States? Support OWS

+13 # wleming 2012-01-25 12:44

romneys another regular guy
who only wishes you good too
off shore tax havens and swiss accounts
clearly make that true
just a good mormon
filled with charity
whose sole concern as we have seen
is fiscal clarity
lets see him release the rest of the returns
as we watch him sanitize his fiscal twists and turns

-44 # Robt Eagle 2012-01-25 12:52

What about the 47% of those in the US who didn't pay any tax. Won't taxing Romney at a 100% tax rate make up for all those folks who paid nada?

+18 # Billy Bob 2012-01-25 13:08

You don't consider the Payroll Tax a tax?

+11 # AndreM5 2012-01-26 11:51

Or property taxes, sales taxes, auto taxes, gas taxes, etc.

How much does this guy get paid to post his inanities?

+17 # LiberalLibertarian 2012-01-25 13:11

Right On!

Those lousy tax cheats should all be thrown in jail. All they do is take, take take. I bet some of those crooked tax cheaters are living in government subsidized housing. And lots of them are proably ex soldiers that got hurt in defending Mitt Romney's right to make enough in one day to live above the poverty line. I wouldn't be surprised if some of those cheating criminals were getting free health care, or even worse food stamps!

Damn, people, please ignore the ravings of my insane evil Republican twin! Those folks don't pay taxes because they are not paid enough to pay taxes. They are not paid enough so more money can go to the people like Mitt Romney, who get paid more than enough.

So, Robt Eagle NO. 100% is not fair, ae marginal 75% over 5 Million and probably a marginal 50% over 1 Million would be.

Or, he could pay his workers enough so that they can also pay taxes and leave his under 1 Million marginal tax rate at 35%.

He can choose. We just need to change the tax code so he can make the choice.

+16 # Texas Aggie 2012-01-25 13:38

Probably, but if we don't tax the first $30,000 of a family of six, which is why 47% don't pay taxes, then Mitt will live the same way as everyone else. If we raise taxes on them, then your taxes on your first $30,000 would go up, too.

Why is it that rich people don't understand what a graduated income tax is? How did anyone that stupid manage to acquire enough money to pay taxes?

+11 # Billy Bob 2012-01-25 16:33

They understand the concept AND the purpose of a graduated income tax.

They're hoping you don't.

+15 # MJnevetS 2012-01-25 13:43

Stop watching Fox news and READ. The 47% is a fake number; even to the extent it could be argued to be based upon true numbers, it only represents Federal Income Tax (reduced by the Earned Income Credit; a Republican invention (passed by Gerald Ford) I won't go into a lengthy explanation, just read any 'fact based' news source.

+11 # historywriter 2012-01-25 17:36

You mean children? Old people who no longer can work because they of their age or disability from working in meat coolers, in police departments, as grocery clerks and stockers? Or maybe as loggers and miners. Nice work that eventually can kill you.
Used to be that these people quit working because they had to, and they had nothing--no pensions, no assistance. They were lucky if they got family help. So, along comes Social Security and other benefits so people who have worked their tails off all their lives can live in some comfort in their declining years, because of their lifelong contributions. Can't see why anyone would take umbrage at that.

+17 # Susan W 2012-01-25 18:35

If you are speaking about Federal income tax there is a reason they don't pay taxes--their income is too low! Try living on it some day then come back and blather on about what a bunch of shiftless bums the working poor are you clueless person.

+22 # mountainview 2012-01-25 13:34

I chatted with two middle aged women today at a Dr's office. One was unemployed & looking for work; the other's husband is a machinist whose job is being outsourced to China. Both voted in NH for Romney. Go figure. I can only assume they watch FOX and read the statewide right wing newspaper. Oh, and one is sure that Obama isn't a citizen.

+14 # historywriter 2012-01-25 17:37

This is why we get such lousy politicians. People really have no idea what's going on.

+8 # grouchy 2012-01-25 14:01

AMEN!

+5 # jvlarson 2012-01-25 15:17

I'm certainly no tax expert but I seem to recall that if you sell a stock at a loss you can use the loss to offset gains from sale of other stocks. This sounds like a system rigged for the rich.

+16 # berensmann 2012-01-25 20:23

Want to solve the Social Security issue? EVERYONE pays the 7.5%, we all pay on the first $100,000, on ALL income. You make $21 million a la Mitt, you pay $1.5 million to SS. As usual the lowest wage earners support our social programs.

+8 # ozken 2012-01-25 21:09

"The right-wing apologetics now focus on the claim that Romney's taxes aren't really low, because we should impute the taxes that corporations effectively paid on his behalf."

Hold on a minute. I thought that there were American companies like General Electric, Pepco Holdings,Boeing Co, PG & E Corp etc etc for example who earn billions but paid no tax at all?

Get them to pay 30% on profits and the U.S.A. could renew its infrastructure and enhance it's educational system over the next ten year.

+7 # gdp1 2012-01-26 09:13

..the sickening thing about this that never gets mentioned is that the resultant shortfall in federal revenue must be made up for by even MORE borrowing...increasing the deficit that the non-payers scream about...

+8 # historywriter 2012-01-26 09:27

Any Social Security shortfall can be taken care of by raising the total amount people must pay in beyond the current $108,something limit per lifetime. It probably would be a lifetime contribution that we would not miss, but would fix SS without measures that limit benefits, raise ages of retirement, etc.

+6 # mgorfain 2012-01-26 17:18

"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both." ...former Aassociate Justice of the U.S. Supreme Court, Louis Dembitz Brandeis

Something else to ponder -
(quoted from another blogger)

"capital gains" can have next to nothing to do with whether a company has paid corporate tax. You could have bought a nonsense dotcom stock in the late 1990s, which never made a profit or paid tax and sold it a few months later for double the price. In what way has your resultant capital gain been taxed twice?

Refresh comments list
RSS feed for comments to this post.

THE NEW STREAMLINED RSN LOGIN PROCESS: Register once, then login and you are ready to comment. All you need is a Username and a Password of your choosing and you are free to comment whenever you like! Welcome to the Reader Supported News community.