Thu 16 Aug, 2012 12:19 am
Aug. 15, 2012
Ryan's 'Roadmap' would have slashed Romney's tax bill
Dave Umhoefer | Milwaukee Journal Sentinel
MILWAUKEE -- ]
The sweeping fiscal plan proposed by U.S. Rep. Paul Ryan in 2010 would have driven GOP presidential candidate Mitt Romney's effective tax rate down to 1 percent or 2 percent on the $21.6 million income Romney and his wife, Ann, reported that year.
The evidence for that comes from the Romneys' tax return and a Tax Policy Center analysis done for the Milwaukee Journal Sentinel in the wake of national media reports on the issue after Romney named Ryan his running mate.
But Romney - not Ryan - is atop the ticket, and the former Massachusetts governor has a tax reform plan that stops short of Ryan's "Roadmap for America's Future."
And Ryan himself did not include his 2010 tax proposals in House budgets he drew up in 2011 and 2012.
Ryan's 2010 "Roadmap" called for elimination of taxes on investment earnings such as capital gains, dividends and interest, as well as the estate tax, to spur more investment and eliminate what Ryan called the double taxation of savings.
Romney, by contrast, would wipe out those investment-earnings taxes only for Americans with an adjusted gross income of less than $200,000, his website says.
Wealthier Americans, such as Romney, wouldn't get the break.
Weekend stories by Roll Call and The Atlantic on how Romney might have fared under Ryan's plan illustrate the political risks inherent in Romney's choice of Ryan, who has authored unusually detailed budget blueprints on spending cuts and tax changes he says will help the United States avoid a debt crisis.
The Romney camp sought to minimize those risks over the weekend.
On day one of the rollout of the Romney-Ryan ticket, various newspaper websites headlined an Associated Press story with variations of "Romney wary of Ryan's budget."
Those headlines came after Romney and his top aides sought to make clear that Romney has his own budget plan "and that's the budget plan we're going to run on," The Associated Press reported.
Romney's comments followed volleys by President Barack Obama and Democrats across the country claiming that Romney and Ryan were taking the side of millionaires, not the middle class.
Democrats correctly pointed out that Romney clearly endorsed Ryan's budget plan this year during the bitter GOP primaries, and Romney so far has shown no indication he was flip-flopping on that.
There's an important footnote here, though.
The Romney and Ryan camps correctly point out that Ryan's tax-elimination proposals were not part of that budget plan that Romney praised. That plan for 2013 passed the GOP-controlled House but not the Senate.
Romney, Ryan's campaign said Monday, would pay the same tax rates under the Ryan 2013 budget plan as under current law.
Ryan's tax proposal was in his earlier "Roadmap" plan that went nowhere in 2010.
Ryan, though, still promotes his "Roadmap" ideas, making them fair game in the election.
Roll Call's analysis said Romney in 2010 would have paid "about 1 percent" in taxes under Ryan's 2010 "Roadmap"; The Atlantic said 0.82 percent. Those relate to Romney's 2010 return, the only final return he's released. That return showed Romney's effective tax rate was 13.9 percent.
The Journal Sentinel consulted with the Tax Policy Center, a project of the Urban Institute and Brookings Institution, which put the figure at 1 percent to 2 percent, depending on certain assumptions about Romney's income.
The reason for the low tax rate: Most of Romney's income was not from wages but from capital gains, dividends and interest - which Ryan's roadmap would exempt from taxation, said Roberton Williams , a senior fellow at the Tax Policy Center.
Romney himself provided backing for these numbers during a GOP primary debate in Florida in January when Newt Gingrich proposed no taxation on capital gains tax.
Romney responded: "Well, under that plan I'd have paid no taxes in the last two years."
A Romney campaign spokesman, Kevin Madden, on Monday called speculation about Ryan's earlier plan "irrelevant" to Romney's plans. Aides pointed to his statement that the richest Americans pay the largest share of taxes and should pay no less than the current share.