Somebody Wants To Hit Romney Over His Statements on Taxes (UPDATED)

Thursday, September 06, 2007

MITT ROMNEY

A foe of Mitt Romney is irked by his statements in last night's debate regarding taxes. He begins by examining Romney's statement, “The Democrats wanted to raise taxes. I said, 'no way.' And in fact we did not raise taxes on our citizens, and we lowered them across that state time and again.”

This foe notes that the reduction of income tax rates in the state was frozen at 5.3 percent in 2002... and it's still 5.3 percent today.

Romney said,“We provided help to senior citizens on real estate taxes,” and this foe finds that statement inconsistent with his opposition to a bill that would give senior citizens tax relief, pointing to some articles from 2004:

“Gov. Mitt Romney and anti-tax activists are launching a public campaign against a proposed property tax break for senior citizens - branding it a ‘direct assault’ on Proposition 2 1-2.” (Elizabeth J. Beardsley, “Gov in Bid to Halt Senior Tax Relief,” Boston Herald, 2/26/04)

“Calling it an attempt to undermine the state’s property tax limit, Governor Mitt Romney yesterday vowed to veto a measure that would spare thousands of seniors from tax increases cleared by voters in cities and towns.” (Scott S. Greenberger, “Romney Vows To Veto Seniors’ Tax Break,” The Boston Globe, 2/27/04)

Having said that, I would note that Romney argued at the time the initiative was designed to remove senior citizen's opposition to property tax hikes — if they were no longer affected, they wouldn't show up on Election Day to vote against them.

Finally, this foe has a bone to pick with the Romney's statement, “We changed the capital gains tax increase to a capital gains tax refund.” The argument, again citing news coverage at the time:

“Governor Mitt Romney yesterday filed legislation to return approximately $250 million in 2002 state capital gains taxes to 145,000 investors … Romney’s proposal comes nearly two months after the Supreme Judicial Court ruled that a 2002 change to the state’s capital gains tax rate was unconstitutional because it took effect on May 1, 2002, almost halfway into the tax year. The court said the Legislature had two options: roll back the effective date of the rate change to Jan. 1, 2002, which would mean collecting an additional $150 million from 120,000 taxpayers who saw capital gains between Jan. 1, 2002, and April 30, 2002; or push the effective date forward to Jan. 1, 2003, and return between $225 million and $275 million in capital gains taxes the state has already collected. Romney argues that pushing the date back to Jan. 1, 2002, which will happen automatically under the terms of the SJC decision, would be unfair because it would tax gains retroactively, to a period when investors could not have been aware of the tax impact of their transactions.”(Raphael Lewis, “Romney Bill Aims To Rebate 2002 Capital Gains Taxes,” The Boston Globe, 6/11/05)

“House and Senate lawmakers approved a bill Monday designed to repeal a retroactive capital gains tax hike from 2002 and send out about $275 million in tax rebates over the next four years. A spokesman for Gov. Mitt Romney said he’s expected to sign the bill.” (“Lawmakers Pass Bill Repealing Retroactive Capital Gains Tax Hike,” The Associated Press, 12/5/05)

In this case, the Romney foe isn't arguing that the governor didn't do what he said, but that the courts forced the issue and that the legislature did the heavy lifting. In the pantheon of politician's sins, I think taking too much credit for good news is pretty run of the mill...

UPDATE: A person who was present for that fight contends Romney's foe is off base:

It is not accurate - at all - to say that "the courts forced the issue and that the legislature did the heavy lifting," and to conclude that Romney is "taking too much credit for good news..." If anything, he is taking too little credit and I wish he would play up that episode - and his role in it - more. I think he does not because quite honestly the legal machinations were far too complex even for the press or the public to fully absorb at the time, say nothing of a couple of years later. It is true that "the courts forced the issue," but not in the way the news excerpts you provided imply. The Supreme Judicial Court found the tax scheme as it stood to be unconstitutional, but it deliberately and emphatically refused to prescribe a solution, simply noting that the legislature could either (a) raise cap gains taxes retroactively on one group of investors or (b) reduce them retroactively on another. Far from doing "the heavy lifting," the legislature immediately and predictably moved to take option (a) - to raise taxes retroactively to the tune of several hundred million dollars. Had Governor Romney not come out forcefully against that move it would most definitely have happened. Instead, the Governor's public stance motivated grass-roots opposition to the unprecedented retroactive tax hike, culminating in a packed legislative hearing that was well-covered in the press and resulted almost immediately in a complete (and very public) about-face on the issue by the legislature. This was a great example of Governor Romney standing up for conservative fiscal policy- and, not incidentally, for what was just objectively right. The State ended up having to tighten its belt a little bit, but that was much preferable to the disastrous message that would have been sent to investors by way of revised tax bills on over-two-year-old transactions.

09/06 02:59 PM Share