Romney’s tax rate is only half the problem

In the wake of his concession yesterday that he pays a lower tax rate than much of the American middle class, Mitt Romney has renewed discussion about his “15% problem.” As Alec MacGillis put it, “The country is going to spend much of the next year talking taxes. And leading one side of the debate is going to be a silver-templed exemplar of how inequitable the system has become. Again: is this really the man Republicans want for this moment?”

But as I’ve been arguing for a few weeks, it’s only half the problem.

To be sure, the fact that Romney, who amassed a vast fortune as head of a vulture-capitalist firm, is able to take advantage of tax loopholes to pay a lower rate is a political nightmare. In a debate over tax fairness and income inequality, Romney is practically a case study for What’s Gone Wrong.

But the second part of this is more forward-looking: what does Romney intend to do about the problem if he’s elected? As Greg Sargent reported today, citing a new analysis by Citizens for Tax Justice, Romney has no interest in correcting a wrong — rather, he intends to give himself an enormous tax cut.

Under his plan, Romney in 2013 would see his taxes cut by nearly half of what they would be if you use current law as a baseline.

Another way to put this: If Romney, whose wealth is estimated at as much as $250 million, is elected president and gets his way on tax policy, he would pay barely more than half as much in taxes than he would if Obama is reelected and gets his way — and the Bush tax cuts on the wealthy expire and an additional Medicare tax as part of the Affordable Care Act kicks in.

Robert McIntyre, the director of Citizens for Tax Justice, added, “This doesn’t even include Romney’s proposal to cut corporate taxes from 35 percent to 25 percent, which would primarily benefit wealthy shareholders like himself.”

One could argue that Romney’s “15% problem” isn’t really his fault. He’s taking advantage of a tax system that’s already badly flawed, but which he wasn’t responsible for creating. The Romney example helps make clear how unjust the status quo really is, and the fact that he’s hiding his tax returns only makes this worse, but it’s not fair to blame him for loopholes, shelters, and tax breaks he didn’t create.

But one should absolutely blame him choosing to ignore the problem and vowing to make it worse.

On a related note, the DNC released a new video overnight on coverage of Romney’s tax issue. It’s probably not what the Republican frontrunner was hoping for.