Forget Mitt Romney’s Tax Returns – His Tax Policy Would Reduce His Tax Liabilities By _________________________

Anybody Want to Guess?

As everyone starts to focus on Mitt Romney’s financial wealth, hisunwillingness to release his past tax returns and his petulant complaining that everybody is focusing on Bain Capital, it is worth noting what Mr. Romney’s tax policy will do for Mr. Romney.

First of all Mitt has amassed over $100 million in an IRA.  Considering the contribution limits it is pretty hard to see how this has occurred, but he probably did it mostly legally.  But Mitt now has a tax problem.  In a few years he will have to start withdrawing that money and pay taxes on it.  See Mitt is used to paying only about a 15% tax rate, and if the Bush era tax cuts expire he will pay about 40% on that money.

So Mitt’s plan is to reduce the tax rate on high income people, and his 40% would drop to 28% or lower.  So this saves Mitt at least $12 million in taxes.  But according to Mitt this is a good thing, because he is a job creator and the way America works is that Mitt will use this money to create jobs.  Except he won’t.  About the only thing Mitt has done since he left Bain Capital in _______ (pick your year) is run for public office.  And that doesn’t create many jobs.  So Mitt is Exhibit A as to why his tax plan won’t work to create work, but will work to create more wealth for the wealthy.

But the big deal in Mitt’s tax plan is his goal to eliminate the Estate Tax.  This Tax would probably cost Mitt about $100 million, so eliminating that is a nice present for someone who surely needs another $100 million.  This might create jobs as Mitt’s heirs might use the money to, say, increase the garage size in Mitt’s house they inherit and install another elevator for the cars.  But mostly it will make sure that Mitt’s children and their children never have to work a day in their life.  Which is good because Mitt’s tax policy won’t be creating any jobs for them.

One thing we do know for sure is that Mitt Romney is highly motivated to increase his own personal income and wealth.  So he may look upon the Presidency as just another good career move.  Get elected, get tax changes worth maybe $150 million to him and his family, and then after one term move on.  After all, it's not like he has some grand governing philosophy, or urge to help people that is driving his political career.

As for the rest of us, if Mr. Romney is elected and if his tax policy is implemented we will always have the unwanted consolation of pointing out how it didn’t restore high growth or high employment to the economy.  Mitt won’t mind, he will have all those tax savings to console him.