President Obama has been rather relentless lately in arguing, as Ronald Reagan did, that the very wealthy shouldn’t’ pay a lower tax rate than America’s middle class. To drive the point home, the president generally points to billionaire Warren Buffett and his secretary.
Michael Scherer reports this week that there appears to be a more politically salient example, which we’re likely to hear more about.
[Republican presidential hopeful Mitt] Romney, a wealthy man whose income mostly comes from long-term investments, is exactly the sort of “millionaire and billionaire” that Obama likes to hold up for scrutiny, since the source of Romney’s income allows him to pay a lower percentage of his money to the federal government each year than many middle-class wage earners.
Romney starts off with an enormous base of wealth, worth hundreds of millions of dollars, in part from his vulture capitalist fund where Romney got rich laying off American workers. On top of this, the former governor made a few million in 2010 in royalties and speaking fees, and millions more dividends and capital gains, which is generally taxed at a much lower rate.
While exact figures are unavailable, Scherer, with some help from the Citizens for Tax Justice, estimated that Romney “would have paid roughly 14% of his gross income in taxes to the federal government in 2010.”
In other words, Romney pays a much lower tax rate than the typical working-class family — making the GOP presidential frontrunner a poster child for the problem Obama wants to correct.
What makes this especially interesting in a campaign context is that Romney argues the lower rate on capital gains should remain in place. He also argues that middle-class Americans who don’t make enough to be eligible for income taxes should see their tax bills go up and should shoulder a greater tax burden.
Taken together, it offers Democrats a chance to present a devastating-but-true message to voters: “Mitt Romney pays a lower tax rate than you do. He not only wants to keep it that way, he wants you to pay more.”
Romney’s atrocious jobs record may not be his most damaging weakness as a national candidate.
Paul Begala, now with PrioritiesUSA Action, already seems excited by the possibilities. “Millionaire Mitt thinks he should pay a lower tax rate than maids and Master Sergeants,” Begala said. “And that’s what we’re calling the Romney Rule.”