Romney’s tax returns provide ammo for his opponents

Finally, grudgingly, Mitt Romney has released his tax returns for the last two years. After much um-ing and ah-ing — and a lot of prodding from Democrats, Newt Gingrich and the media – he has disclosed that he paid $3 million in tax on his 2010 income of $21.7 million, and $3.2 million on the $20.9 million he made in 2011. Romney hoped that releasing this information would allow him to move past the focus on his financial affairs, but his rivals – both inside and outside his own party — don’t seem prepared to let that happen.

The Democrats are naturally keen to emphasise both Romney’s large investment profits – they show he’s ‘out of touch’ with average Americans, they say – and the relatively low rate of tax he pays on them. The latter provides them with a perfect opportunity to keep the former in the spotlight while pushing Barack Obama’s long-held policy aim of raising taxes on high earners. Obama called his proposed tax-hike on those with incomes over $1 million the ‘Buffett Rule’, after billionaire Warren Buffett who said he shouldn’t be paying a lower tax rate than his secretary’s.

Already the point’s being made that Romney’s effective tax rate of less than 15 per cent is probably lower than his own personal assistant pays. And — unsurprisingly — the Buffett Rule will feature heavily in Obama’s State of the Union speech tonight. Asked about Romney’s taxes this morning, White House adviser David Plouffe said:

‘I do think it raises a general point about our tax system here. One of the things that the president is going to talk in the State of the Union tonight is something what Warren Buffett famously talked about — that he should not pay less in taxes than his secretary does. The president, as you know, has talked about something called the Buffett Rule. We’re going to outline that specifically tonight — what that would mean, so that we make sure everybody in this economy is doing their fair share.’

It’s a gift for Team Obama: they can make the case for a very popular policy while simultaneously reinforcing their favourite caricature of Romney as a Gordon Gekko-style Wall Street millionaire — without even mentioning his name.

And Romney’s troubles don’t end with the Democrats. Newt Gingrich isn’t exactly running a typical ‘defend the rich’ Republican campaign — having already heavily attacked Romney’s investment career — and is trying to make as much hay as he can out of all this. But then, as Romney pointed out in the debate last night, Gingrich’s proposal to eliminate capital gains tax would reduce Romney’s tax bill to zero.