Democrats are making a big deal of Mitt Romney’s taxes. Romney released his 2011 tax returns last week. They showed he paid $1.9 million in federal income taxes on an income of $20 million, a 14.1 percent rate. That is, his opponents are quick to point out, a lower rate than a person earning $50,000 a year would owe.
Romney’s rate was low because his income is from investments rather than salary. He told television reporters he thinks the lower tax on investment is both fair and good policy because it encourages investment.
He shouldn’t be criticized for taking advantage of the tax structure. He had nothing to do with passing those laws. It is both legal and moral to pay the lowest legal rate tax accountants can find. And if he has taken advantage of overseas tax havens over the years that were also legal, that’s OK, too. Those loopholes should be closed, but that’s for Congress to do.