Wednesday, January 25, 2012

Romney's Tax Problem

Mitt Romney has a tax problem. It's not your typical political tax scandal, which usually begins and ends with missed filing deadline, or underreported assets. The problem is that Mitt Romney pays less in taxes on each dollar than many middle-class families.
Jeanne Johnson, a political independent and owner of the Lake Alfred Barber Shop, said that when she heard the news of Romney's taxes on TV, "I thought I was going to throw up."
And that was probably before we realized that Mitt Romney's money was sheltered in foreign bank accounts. He placed money in Swiss Bank accounts and Cayman Islands trusts, banking havens known for their willingness to flout other countries' tax laws.

Also missing from Mitt Romney's tax payments is money that most Americans put into Social Security and Medicare. The average American pays over 7% of their income to support these safety net programs. Only 0.1% of Romney's income goes to support them.

What's the problem exactly? There's nothing illegal that's been proven, even if the traces of Swiss Bank accounts and Cayman Island trusts are fishy.

Work is important. Work builds not only our personal wealth, but the wealth of those we work with. America is built on hard work, innovation, and a can-do spirit. Romney's problem is that his income doesn't come from hard work. Romney believes that we should celebrate his wealth no matter where it came from. Americans know that some wealth is earned with hard work, and some wealth simply isn't.

Mitt Romney has accused everyone of envying his wealth. He believes that his 'wealth problem' is a result of populist anti-1%-ers. But he's wrong about the fundamental issue: Romney doesn't have a 'wealth' problem; he has a work problem. Last summer, Mitt Romney sat down with a group of uninsured Floridians. "Well, I'm unemployed too," he joked. Of course, he hasn't gotten a job since then, hired any workers, innovated, or done any of the things that "job creators" supposedly do. He's campaigned, and made $20 million a year while doing it. He didn't work for that money. Why should he pay less in taxes on it than someone who would have?

Mitt Romney knows there's a problem here. His tax code furthers the gap between what he would pay and what everyone else would pay. Mitt Romney paid less in taxes than he was letting on. Romney's tax rate was far lower than what a middle class earner pays, whose productivity is the highest it has ever been. Investment is productive for the economy, but Mitt Romney's not doing any actual work.

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