Mitt Romney would have paid very little in federal income taxes the past two years under the tax proposal from his running mate, Representative Paul Ryan.
Romney, one of the richest candidates to ever run for president, has been bedeviled for months by criticism over his tax returns, first for revealing that he paid 13.9 percent in such taxes in 2010 — a figure that is lower than that of some middle-class Americans — and then for declining to release more than two years of returns.
Under Ryan’s plan, tax rates would be cut across the board. Most significantly for those wealthy taxpayers, like Romney, who earn most of their income through investments and not wages, Ryan’s plan would eliminate the tax on most capital gains. Currently, the rate on most gains is 15 percent.
Romney himself acknowledged he would benefit disproportionately from such a plan when he criticized former rival Newt Gingrich in a GOP debate this year. Gingrich’s plan also called for the elimination of capital gains taxes.
“Under that plan, I’d have paid no taxes in the last two years,” Romney told Gingrich. He added during the debate that he was “proud of the fact that [he pays] a lot of taxes” under the current system.
Almost all of Romney’s income comes from capital gains, according to the 2010 tax return and 2011 estimate he released in January.
The Democrats seized upon the issue Sunday.
“Governor Romney would pay less than 1 percent on his taxes,’’ Obama adviser David Axelrod told CNN’s “State of the Union.” “How is that going to strengthen our country, strengthen the economy, help the middle class?”
On the same program, Representative Chris Van Hollen of Maryland,the ranking Democrat on Ryan’s budget committee, said that “in picking Paul Ryan, what Mitt Romney has done is pick somebody who has an economic plan and a budget plan that is great for people just like Mitt Romney. It’s great if you’re very wealthy in this country because it provides you additional tax breaks, but it does so at the expense of everyone and everything else.”
The Romney campaign declined to comment on the record about Ryan’s proposed elimination of the capital gains tax but has shown no sign of deviating from the tax plan Romney has already laid out, which calls for eliminating the capital gains tax only for couples making less than $200,000 per year and individual filers making less than $100,000. Wealthier people would continue to pay the current 15 percent rate.
Romney, in an interview with Ryan on “60 Minutes” Sunday night, was emphatic that he would lead the charge on reforms to the tax code. “Well, I have my budget plan as you know that I’ve put out and that’s the budget plan that we’re going to run on,’’ he said.
Ryan, the chairman of the House Budget Committee, has developed a far-reaching plan that includes tax reform. To help pay for the lower rates, the plan would eliminate some tax deductions, subsidies, and credits.
Reince Priebus, the chairman of the Republican National Committee, indicated that Romney won’t adopt every aspect of the Ryan budget, saying on “Meet the Press”: “I think Mitt Romney appreciates and admires the work and the ideas that Paul Ryan has done, but Mitt Romney has his own ideas,” he said.
Businessman’s contributions to Ryan may draw scrutiny
Democrats have wasted little time blasting Republican vice presidential pick Representative Paul Ryan over his blueprint for the federal budget but a more obscure part of his record could also draw attention: his relationship with a convicted Wisconsin businessman.
Ryan accepted nearly $60,000 in contributions from businessman Dennis Troha and his family, records show. Troha was later indicted on campaign finance charges over an Indian casino he sought to open. During the casino application process, Troha said, Ryan, a Republican of Wisconsion, called federal regulators at his request.
Ryan also supported a bill in Congress that benefited Troha and his trucking company, legislation that drew the interest of federal prosecutors because of the contributions Ryan and other congressman had accepted from Troha and his family.
The Wisconsin congressman was not found to have violated any laws.
He was among more than 20 politicians of both parties who benefited from Troha’s largesse.
Troha was convicted of funneling illegal donations to other politicians, not Ryan, and Ryan donated Troha’s contributions to youth programs when the businessman was indicted.
When a Troha associate pleaded guilty in the campaign finance scheme, the only political figure specifically named in court documents for receiving contributions from the associate was Ryan.
A Romney campaign official, speaking on the condition of anonymity because he was not an authorized spokesman, said the campaign looked into the Troha matter ‘‘and concluded it was a complete non-issue.’’
Ryan’s relationship with Troha is one of several themes that could become campaign fodder, including his longtime status as a Washington insider and his personal finances.