Former U.S. presidential candidate Mitt Romney recently published an op-ed in the New York Times in which he argued that the rich people, including him, should pay more taxes. This represents a strong contrast to his previous stance.
What is Mitt Romney Suggesting?
Romney writes in the article that typically, “Democrats insist on higher taxes, and Republicans insist on lower spending.” He is championing the merger of two approaches. According to Romney, the DOGE “failed spectacularly” in lowering the spending. He suggests “entitlement reform” for programs like Social Security and Medicare. This would include a change in benefits for future retirees, which are “means-tested — need-based.” Additionally, he advocates linking the starting age for entitlement payments to American life expectancy.
On the matter of taxes, Romney doesn’t suggest some special tax hikes for the rich. He briefly mentions “increasing income level on which FICA employment taxes are applied,” but focuses more on closing tax loopholes, or “caverns” as he refers to them. They are often used by the rich to avoid paying high taxes on capital gains. He provides an example of a provision that helps heirs avoid paying tax on large estates they inherit, no matter how much they have increased in value over time. Then there is “real estate caverns” like 1031 exchange, which allows real-estate investors to depreciate their assets and avoid or defer paying taxes.
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Romney of the Past Was Much Different
Romney’s calls for taxing the rich should be viewed in the context of his previous actions and statements. During his unsuccessful presidential campaign in 2012, he faced criticism for stalling his tax returns release and having assets in Swiss banks and on the Cayman Islands. Romney followed up by releasing only two years’ worth of records, which showed he paid a substantially low amount of taxes compared to his income. Out of the $45 million income, he ended up paying only $6.2 million. When asked about it, the former Massachusetts governor said that he pays “all the taxes that are legally required and not a dollar more.”
This wasn’t the only tax-related controversy that followed Romney in 2012. In a speech during the private fundraiser, he said that the Americans who don’t pay federal income taxes are “entitled” and that his job is “not to worry about those people.” He also opposed calls for a budget fix that would include increased taxes for the richest.
Too Little, Too Late Romney’s change in opinion is admirable, but it doesn’t hold much weight at this point. He won’t magically change the broken tax system. Romney doesn’t have any real power to kick-start any change. His wealthy GOP friends, who have the final say on these things now, like the current loopholes and caverns too much.
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