No doubt about it, Mitt Romney has walked into a buzz saw of bad publicity over his income taxes.
First he hems and haws about revealing his returns, before agreeing to release them in April – knowing all along, certainly, that he would have to. Then he lets drop that he pays an effective rate of 15 percent, because his income derives mostly from investments rather than a salary. That’s well below the 25 percent President Obama paid and the 23.4 percent Texas Gov. Rick Perry paid in 2010 -– and, of course, well below what middle-class working stiffs pay.
And how about those speaking fees? Mr. Romney also casually mentioned that he makes money giving speeches, “but not very much.” Turns out Romney’s definition of not very much is $374,327.62, the amount he made from speeches between February 2010 and February 2011, according to his financial disclosure forms.
Romney’s opponents for the Republican presidential nomination have roughed up the former Massachusetts governor as best they could over the tax issue – as has Team Obama, which expects to face Romney in November.
But here’s why, in the end, the whole tax kerfuffle probably won’t matter, both in the Republican nomination fight and, if Romney gets the nod, against President Obama.
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Voters already know that Romney is very wealthy, with a stated net worth of between $190 million and $250 million. That information is already baked into their assessment of him, both as a potential president and in that elusive measure of “likability.” Now that they know his (low) tax rate, chances are Republican voters aren’t suddenly going to decide that he’ll have a harder time beating Mr. Obama than the other GOP candidates in the field.
Knowing Romney’s tax rate doesn’t change the fact that he is best equipped to take on Obama in terms of money-raising and organization. It also doesn’t much change the calculus going into November. At heart, Obama’s reelection chances rest on how Americans are feeling about the economy, not on the tax advantages his wealthy opponent has, if it’s Romney.
The fact that Romney pays only a 15 percent tax rate may breed some resentment, but assuming that he is playing by the rules, it’s not his fault that the IRS treats investment income more favorably than paid work. In fact, if some of the other GOP candidates had their way, and eliminated taxes on capital gains, Romney would be paying even less in taxes.
Romney was never going to score well on the proverbial measure of “someone you’d want to share a beer with” – or a root beer, in the case of the teetotaling Romney. Knowing his tax rate doesn’t make him seem any less relatable than he already was.
Americans have a complicated relationship with the wealthy. They may envy them, but many also admire them and want to be like them. That’s why Obama’s arguments about raising taxes on millionaires and billionaires aren’t as universally popular as one might expect.
Still, the Democrats are going to ride Romney’s new nickname – Mr. 15% – as long as they can. And because Romney’s wealth is a result of his years at Bain Capital – which involved not only helping build successful companies but also entailed closing businesses and firing people – there’s a nice one-two punch for attack ads and stump speeches.
Furthermore, as The New York Times reported last month, Romney continued to reap income from Bain deals through February 2009, nearly 10 years after he left the company. If Romney’s advisers can teach him one thing, it’s going to be to watch the “rich guy” rhetoric – references to multiple homes, lawn-care services, and making “not much” income from speeches.
The White House has already begun punching over Romney’s taxes. At his briefing on Tuesday, press secretary Jay Carney revealed a bit of opposition research on the history of presidential candidates and their tax returns.
“I think it was a tradition that was initiated by then-presidential candidate George Romney back in 1968, who released 12 years of tax records in ’68, as I understand it,” Mr. Carney said.
Former Michigan Gov. George Romney, of course, was Mitt Romney’s father.