Mitt Romney released a new tax plan this week, promising Americans that he would make sure that the wealthiest Americans will pay as much or more in taxes than they do now. Speaking to a crowd in Arizona, Romney said:
I’m going to limit deductions and exemptions, particularly for high-income folks … For the high-income folks, we’re going to cut back on that, so that we make sure that the top 1 percent keeps paying the current share they’re paying or more.
If Mitt Romney cares about making the wealthiest Americans pay their fair share, he should take another look at his own tax plan, which actually maintains many of the tax preferences and deductions for America’s wealthy that he says he wants to limit. In fact, he specifically supports and has defended the carried interest tax loophole—a tax policy lets private equity and hedge managers pay a 15% tax rate on the payments they receive for overseeing other people’s investments. Corporate executives, on the other hand, pay the normal 35% tax rate.
But Romney has 13 million reasons for wanting to keep the carried interest loophole. Over the past two years, Romney received $13 million from Bain Capital thanks to the carried interest loophole—and will continue to pay a low tax rate on those millions if his tax plan is implemented. Perhaps that’s why Romney has consistently refused to eliminate the loophole since 2007. Just last month, he said once again that “to choke off” capital gains is “the wrong way to go.”
President Obama’s plan to close the carried interest loophole would help rebuild our economy and sustain the middle class. By closing it, the deficit could recoup $10 billion over the next 10 years. Even the billionaire investor Warren Buffett, who has benefited from this loophole, thinks it’s unjustified that the wealthiest often pay a much lower tax rate than working Americans. If Romney wants to continue standing up for an unfair tax loophole for the wealthy, he’ll be standing up alone.