David Frum

07.09.12

George Romney's Money

I agree with Paul Krugman that there's a lot to admire in George Romney's business and financial record. That said, Krugman's take on the George Romney tax records misses the mark:

[D]uring his run for president, [the elder Romney] released not one, not two, but 12 years’ worth of tax returns, explaining that any one year might just be a fluke. From those returns we learn that in his best year, 1960, he made more than $660,000 — the equivalent, adjusted for inflation, of around $5 million today.

Those returns also reveal that he paid a lot of taxes — 36 percent of his income in 1960, 37 percent over the whole period.

It's very important to remember that when George Romney released those returns, he assumed that the Democrat he'd be facing in 1968 would be Lyndon Johnson, probably the most financially secretive man ever to hold the office of president. As a sitting senator, Johnson had benefited from his political influence to accumulate a fortune worth perhaps $90 million in today's money.

By releasing his returns, Romney created an excruciating political problem for Johnson. Would Johnson do the same? If not, why not? If yes, what would the returns show?

There's always a tendency to treat the politicians of the prior generation as the last of the Romans. More often, though, they moved and acted much as our own politicians do, and for much the same reasons.