Romney Connects with Taxpayers

By Mr. Curmudgeon

Former Massachusetts Gov. Mitt Romney seemed destined for greatness after primary wins in Iowa and New Hampshire. After successfully defending himself against charges by GOP rivals the he engaged in crony capitalism and corporate raiding, things took a decided turn for the worse after it was learned Romney paid a mere 15% of his annual income in taxes. Newt Gingrich quipped that he didn’t mind Romney’s low tax bite, if only he would offer a tax plan that extended this rate to everyday working Americans, which on average surrender 36% of their paychecks to government. Gingrich also took the opportunity to mention that he paid 31% of his income in taxes – just like the typical working stiff.

“I can tell you we follow the tax laws,” said Romney while campaigning in New Hampshire, “And if there’s an opportunity to save taxes, we like anybody else in this country will follow that opportunity.” And follow that opportunity he did … all the way to the tropics.

ABC News reported on Wednesday’s “Nightline” that Romney parked approximately 8 million dollars in 12 of Bain Capital’s 138 investment funds headquartered in the Cayman Islands. One of these offshore entities is no larger than a post office box … which it is.

A Romney spokesman told ABC, “The tax consequences to the Romneys are the very same whether the fund is domiciled here or another country,” but added that Bain Capital’s Cayman Island funds are designed to shield foreign investors from U.S. taxes.

Back in October, Romney was less than enthusiastic about Herman Cain’s 9-9-9 flat tax proposal and told a group of New Hampshire supporters listening by conference call that Americans would “find it very troubling. There will be some, by the way, who find that their taxes will go down a lot, and they'll find it very attractive. There are others who will find that their taxes go up a lot,” said Romney.

And this brings us back to Gingrich’s point. Establishment Republicans, like Romney, are just fine with today’s Progressive tax code. The Warren Buffetts and Mitt Romneys of Progressive America derive income from dividends, stock sales, bonds and options trading. Their income, therefore, comes under the definition of capital gains, which are taxed at around 18%. And there is nothing inherently evil about that. After all, capital gains are a tax on money that’s been previously taxed.

But a flat tax – Herman Cain’s for example – would remove layers of tax complexity, the enormous costs of compliance and, more importantly, require the 45% of Americans who pay no federal income tax to put some skin in the game.

Recently, Romney came across Ruth Williams, a 55-year-old volunteer working at his election headquarters in Columbia, South Carolina. As a part-time employee for K-Mart, Williams is struggling financially and was unable to pay her electric bill. After meeting her at a campaign stop, Romney gave Williams an undisclosed amount of money. “It kept me and my kids eating this weekend,” she told CNN’s Soledad O’Brien.

Romney could do the same for average, hardworking Americans by offering a bold tax plan that spurs economic expansion and job creation. Putting money to work puts people to work. A flat tax conforms to a basic American principle – that all Americans are equal under the law … even tax law.

Then, there would be no need to park money in Caribbean shell companies.