- The Washington Times - Thursday, January 26, 2012


With the release of his tax forms, Mitt Romney should be having a great media day. However, many in the mainstream media missed the financial forest for the trees as they drilled down into some of the math of the candidate’s financial life. These are the same people who lambast the “1 percent” as self-appointed champions of the “99 percent.” They ignore the reality that the poorest 20 percent in the United States are among the world’s top 1 percent in wealth. It is all a matter of perspective.

Mr. Romney’s taxes tell a unique story of American possibilities and success that could inspire others with a road map toward personal prosperity. It’s all there in the fine print.

Lesson 1: Mitt Romney knows how to make money and create jobs.

In free enterprise, people are rewarded when they move assets to higher-valued uses such as investing in products and services that create value and provide benefits for people, such as jobs.

Fortunately for all who have a stake in the U.S. economy, the present tax system recognizes that private investment is a social good that benefits all of us through job creation and economic activity. The tax code rewards those who put their capital at risk and allows them to pay taxes at a lower rate on the profits of their investments (recognizing that when these invested sums were earned, taxes already were paid once at the earned-income rate). Having embraced this system fully, Mr. Romney reported much of his income as capital gains, dividends and interest payments and paid taxes at the lower rate.

Most people benefit from the jobs created through capital investment without assuming the risks of the venture. They draw a salary from someone who took a risk to create a business, from someone who paid taxes on their salary, built up their resources and invested in an idea. Almost half of Americans will not pay income taxes on their incomes.

Rather than railing against someone who risked time, money and reputation on a venture - and won - Mr. Romney’s critics should be asking whether those skills could benefit the broader American economy. At this time of devastating unemployment, Mr. Romney’s proven record as a good investor and job creator, as told in his taxes, is a credit to his abilities. Perhaps if he had been in this White House, the taxpayers would not have lost half a billion dollars in Solyndra.

Lesson 2: Mitt Romney is a prolific saver and hopeful investor.

The fact that Mr. Romney has considerable income to invest comes, in part, from the discipline of savings combined with the hope of investing. Mr. Romney showed that he had the self-control and fortitude to accumulate resources carefully. Then he showed himself willing to take risks that could benefit hardworking Americans. That combination of traits proved profitable for almost all who work with him.

Many are critical of the banking industry today, which is hoarding resources for fear of future losses. No one has been talking about the fact that Mr. Romney could just as easily have hoarded his resources rather than investing them into other people’s dreams.

He proved himself willing to take a chance on a better America.

Lesson 3: Mitt Romney is very generous.

Successful capitalists are uniquely equipped for great generosity. Mr. Romney gave more to charity than he paid in taxes. That is a rare thing, indeed. He gave away more than $7 million to his church and other charities. He paid more than $6.2 million in federal taxes.

Try to name another presidential candidate - or president, for that matter - who has given more to others than he paid in taxes. Most of our liberal friends will argue that paying taxes is the moral equivalent of charity because they feel they gave to the nation’s needy in the form of taxes. Moreover, Mr. Romney has established a charitable foundation to give money effectively and efficiently to those in need.

This kind of giving changes people and communities as government never can or does.

Lesson 4: Mitt Romney takes care of his family and future generations.

Mr. Romney has established three family trust funds to provide for his family and future generations. Today in America, the possible collapse of Social Security, Medicare, Medicaid and the already flailing Obamacare system, with all their unfunded requirements, causes many to fear for their sick and elderly family members. Mr. Romney took care to make a plan for his family without burdening the taxpayer.

Lesson 5: Mitt Romney understands the value of good advice.

Mr. Romney’s financial life is very complex, as evidenced by the 550-page federal tax return he filed. It is not an accident that he has organized his finances and investments in such a way as to pay the lowest legal tax. Through a series of completely logical and wise steps, Mr. Romney has created a lot of wealth for himself and his family. The ability to understand and work within the tax code, and the wisdom to find good counsel for complex problems, is a skill that any president could use.

The abilities that created the wealth described in Mr. Romney’s taxes are skills needed by America today. Generating wealth at Mr. Romney’s level is nothing to be embarrassed about; it is something to be celebrated. We should teach our children the benefits and tools of capitalism as we teach them all other life skills.

Class warfare is a weapon used most often by those who burden future generations with their payoffs to present-day voters. It is not worthy of the GOP nomination process. Envy is not the fuel of the economy. The American dream has motivated millions to work for their own success and a better life for their children.

Mr. Romney’s tax forms reveal a hardworking, disciplined, charitable person. Rather than something to be explained away apologetically, Mr. Romney’s taxes should be a signature talking point in a campaign emphasizing economic hope for a struggling nation.

Gary Dettloff is a former Internal Revenue Service attorney who helped establish the Taxpayer Advocate Service. Michael Hamrick is managing partner with Resilient Risk Management. Both are partners with Those Tax Guys.

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