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    John avlon: a rich man named george r. Romney ran for president 44 years ago. He says Romney's son, mitt, hasn't been as forthcoming about his financial affairs. In 1960, Romney made more than $660,000, the equivalent of around $5 million today, he writes. But he also paid a lot of taxes -- 36 percent of his income in 1960, 37 percent over the period.

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    John avlon: a rich man named george r. Romney ran for president 44 years ago. He says Romney's son, mitt, hasn't been as forthcoming about his financial affairs. In 1960, Romney made more than $660,000, the equivalent of around $5 million today, he writes. But he also paid a lot of taxes -- 36 percent of his income in 1960, 37 percent over the period.

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    13 views3 pages

    Mitt's Gray Areas - NYTimes

    Uploaded by

    Simon_Aquiles
    John avlon: a rich man named george r. Romney ran for president 44 years ago. He says Romney's son, mitt, hasn't been as forthcoming about his financial affairs. In 1960, Romney made more than $660,000, the equivalent of around $5 million today, he writes. But he also paid a lot of taxes -- 36 percent of his income in 1960, 37 percent over the period.

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    of 3

    7/9/12

    Mitts Gray Areas - NYTimes.com

    July8,2012

    MittsGrayAreas
    ByPAULKRUGMAN

    OnceuponatimearichmannamedRomneyranforpresident.Hecouldclaim,with considerablejustice,thathiswealthwaswellearned,thathehadinfactdonealotto creategoodjobsforAmericanworkers.Nonetheless,thepublicunderstandablywantedto knowbothhowhehadgrownsorichandwhathehaddonewithhiswealthheobligedby releasingextensiveinformationabouthisfinancialhistory. Butthatwas44yearsago.AndthecontrastbetweenGeorgeRomneyandhissonMitta contrastbothintheirbusinesscareersandintheirwillingnesstocomecleanabouttheir financialaffairsdramaticallyillustrateshowAmericahaschanged. RightnowtheresalotofbuzzaboutaninvestigativereportinthemagazineVanityFair highlightingthegrayareasintheyoungerRomneysfinances.Moreaboutthatina minute.First,however,letstalkaboutwhatitmeanttogetrichinGeorgeRomneys America,andhowitcompareswiththesituationtoday. WhatdidGeorgeRomneydoforaliving?Theanswerwasstraightforward:herananauto company,AmericanMotors.Andheranitverywellindeed:atatimewhentheBigThree werestillfixatedonbigcarsandignoringtherisingtideofimports,Romneyshiftedtoa highlysuccessfulfocusoncompactsthatrestoredthecompanysfortunes,nottomention thatitsavedthejobsofmanyAmericanworkers. Italsomadehimpersonallyrich.Weknowthisbecauseduringhisrunforpresident,he releasednotone,nottwo,but12yearsworthoftaxreturns,explainingthatanyoneyear mightjustbeafluke.Fromthosereturnswelearnthatinhisbestyear,1960,hemade morethan$660,000theequivalent,adjustedforinflation,ofaround$5milliontoday. Thosereturnsalsorevealthathepaidalotoftaxes36percentofhisincomein1960,37 percentoverthewholeperiod.Thiswasinpartbecause,asonereportatthetimeputit,he seldomtookadvantageofloopholestoescapehistaxobligations.Butitwasalsobecause taxesontherichweremuchhigherinthe50sand60sthantheyarenow.Infact,onceyou includetheindirecteffectsoftaxesoncorporateprofits,taxesontheveryrichwereabout twicecurrentlevels.

    MOREINOPINIO

    NowfastforwardtoRomneytheYounger,whomadeevenmoremoneyduringhisbusiness DraftOur careeratBainCapital.Unlikehisfather,however,Mr.Romneydidntgetrichbyproducing ReadMore


    www.nytimes.com/2012/07/09/opinion/krugman-mitts-gray-areas.html?src=me&ref=general&page 1/3

    OpEdCon

    7/9/12

    Mitts Gray Areas - NYTimes.com

    thingspeoplewantedtobuyhemadehisfortunethroughfinancialengineeringthatseems inmanycasestohaveleftworkersworseoff,andinsomecasesdrivencompaniesinto bankruptcy. Andtheresanothercontrast:GeorgeRomneywasopenandforthcomingaboutwhathedid withhiswealth,butMittRomneyhaslargelykepthisfinancessecret.Hedid,grudgingly, releaseoneyearstaxreturnplusanestimateforthenextyear,showingthathepaida startlinglylowtaxrate.ButastheVanityFairreportpointsout,werestillverymuchin thedarkabouthisinvestments,someofwhichseemverymysterious. Putitthisway:Hasthereeverbeforebeenamajorpresidentialcandidatewhohada multimilliondollarSwissbankaccount,plustensofmillionsinvestedintheCayman Islands,famedasataxhaven? AndthenthereshisIndividualRetirementAccount.I.R.A.saresupposedtobeatax advantagedvehicleformiddleclasssavers,withannualcontributionslimitedtoafew thousanddollarsayear.YetsomehowMr.Romneyendedupwithanaccountworth between$20millionand$101million. Therearelegitimatewaysthatcouldhavehappened,justastherearepotentiallylegitimate reasonsforparkinglargesumsofmoneyinoverseastaxhavens.Butwedontknowwhich ifanyofthoselegitimatereasonsapplyinMr.Romneyscasebecausehehasrefusedto releaseanydetailsabouthisfinances.Thisrefusaltocomecleansuggeststhatheandhis advisersbelievethatvoterswouldbelesslikelytosupporthimiftheyknewthetruth abouthisinvestments. Andthatispreciselywhyvotershavearighttoknowthattruth.Electionsare,afterall,in partabouttheperceivedcharacterofthecandidatesandwhatamandoeswithhis moneyissurelyamajorcluetohischaracter. Onemorething:TotheextentthatMr.Romneyhasacoherentpolicyagenda,itinvolves cuttingtaxratesontheveryrichwhicharealready,asIsaid,downbyabouthalfsince hisfatherstime.Surelyamanadvocatingsuchpolicieshasaspecialobligationtolevel withvotersabouttheextenttowhichhewouldpersonallybenefitfromthepolicieshe advocates. YetobviouslythatssomethingMr.Romneydoesntwanttodo.Andunlesshedoesreveal thetruthabouthisinvestments,wecanonlyassumethatheshidingsomethingseriously damaging.

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    7/9/12

    Mitts Gray Areas - NYTimes.com

    www.nytimes.com/2012/07/09/opinion/krugman-mitts-gray-areas.html?src=me&ref=general&page

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