Stand up for facts and support PolitiFact.
Now is your chance to go on the record as supporting trusted, factual information by joining PolitiFact’s Truth Squad. Contributions or gifts to PolitiFact, which is part of the 501(c)(3) nonprofit Poynter Institute, are tax deductible.
I would like to contribute
The day after Mitt Romney introduced U.S. Rep. Paul Ryan of Wisconsin as his running mate, Democratic activist Paul Begala suggested the presumptive Republican presidential nominee took into account how he would personally fare under Ryan’s wide-reaching proposal for overhauling federal taxes.
Begala, a Texan advising a pro-Obama super-PAC, Priorities Action USA, said in a Twitter post on Aug. 12, 2012: "So THAT'S why he picked him. In Jan. debate Romney said of Ryan tax plan: ‘Under that plan, I’d have paid no taxes in the last two years.’"
Did Romney air the personal impact of Ryan’s tax ideas so many months ago?
After emailing Begala, we found Romney’s remark in the Republican presidential candidate debate held Jan. 23, 2012, in Tampa, Fla.
But according to the debate transcript, Begala’s tweet struck a misleading note: Romney, who earlier noted that his proposed tax plan calls for eliminating the tax on interest, dividends and capital gains for anyone making less than $200,000 a year, was referring to a plan advocated by then-candidate Newt Gingrich, the former House speaker.
After Gingrich confirmed that his plan called for a 0 percent tax rate on capital gains, Romney said: "Under that plan, I`d have paid no taxes in the last two years."
Gingrich: "Well, if that -- and if you created enough jobs doing that -- it was Alan Greenspan (former head of the Federal Reserve) who first said the best rate, if you want to create jobs for capital gains, is zero. My No. 1 goal is to create a maximum number of jobs to put the American people back to work. It`s a straightforward argument."
Moderator Brian Williams then changed the subject -- and Ryan’s tax plan went unmentioned in the debate.
Begala later emailed us to share that his tweet stemmed from an Aug. 12, 2012, news blog post by the New York Times. The post, focused on Romney’s just-revealed choice of Ryan, includes this: "In addition, the budget Ryan presented to the House in April last year called for the elimination of taxes on capital gains and dividend income. Romney pointed out in a January 2012 debate that ‘Under that plan, I’d have paid no taxes in the last two years.’"
Begala emailed us that his reliance on the Times’ account shows he "was acting reasonably & in good faith." The Times’ blog post "may have been wrong, but I had a right to rely" on it "for a tweet."
Wondering about the effect of Ryan’s plan, we pulled up an Aug. 11, 2012, news article in Roll Call, a Capitol Hill newspaper, stating that by its analysis, if Ryan’s plan had been law, Romney's effective tax rate in 2010 would have been about 1 percent.
The story says Ryan’s proposal would have shaved Romney’s tax bill by about 90 percent by eliminating taxes on capital gains, dividends and interest -- an element identical to the Gingrich plank singled out by Romney in the debate.
"Since about 95 percent of Romney's $21.6 million income came from those sources in 2010," Roll Call said, "he would pay no taxes on the vast majority of his earnings. It's not certain exactly how low Romney's tax bill would go, but his income from other sources amounts to about $1 million, and Ryan's plan would set a new top rate of 25 percent. Romney's total tax bill would have dropped from the $3 million that he paid to a few hundred thousand dollars if Ryan's plan had been in effect."
The story says Ryan also proposes eliminating the estate tax, "which would benefit Romney's heirs by tens of millions of dollars."
The article’s descriptions of Ryan’s proposal align with information Ryan has on a website devoted to his proposal.
Separately, Matthew O’Brien of the Atlantic wrote in an Aug. 11, 2012, blog post that Romney’s 2010 tax rate under the Ryan plan would have been .82 percent. While his capital gains would have gone untaxed, the post says, Romney’s earnings of nearly $594,000 in author and speaking fees would be taxed at 25 percent. Romney would have saved another $292,389 under Ryan’s proposed elimination of the Alternative Minimum Tax, according to the post, while still owing $29,151 in self-employment taxes on his author and speaking fees. So he would have paid $177,650 out of a taxable income of $21,661,344, the blog post says.
We asked Romney’s campaign about this claim. Spokesman Christopher Walker said by email that Romney has a tax plan, making speculation about other plans irrelevant. On his campaign website, Romney says he wants to maintain existing tax rates on capital gains, interest and dividends for taxpayers with adjusted gross incomes of $200,000 or more.
Contrary to Begala’s claim, Romney was not zeroing in on how he would fare under Ryan’s tax plan when he said he would have paid no taxes the past two years under "that plan." He spoke instead to Gingrich’s proposal to eliminate capital gains taxes for all taxpayers -- which Romney does not advocate.
Like Gingrich, though, Ryan calls for wiping out the capital gains tax for everyone, leaving this claim with an element of truth. We rate the statement Mostly False. UPDATE, 11:20 am, Aug. 14, 2012: After we posted this article, we were happy to hear back about Begala’s source for his claim. We added that information to the article. Our rating is unchanged.
Transcript, Republican candidate presidential debate, Tampa, Fla., Jan. 23, 2012 (provided by the Chicago Tribune)
News article, "Paul Ryan's Tax Plan Would Slash Mitt Romney's Tax Rate to 1 Percent," Roll Call, Aug. 11, 2012
Website, "A Roadmap for America’s Future," U.S. Rep. Paul Ryan, Chairman, House Committee on the Budget (accessed Aug. 13, 2012)
Blog post, "Mitt Romney Would Pay 0.82 Percent in Taxes Under Paul Ryan's Plan," Matthew O’Brien, the Atlantic, Aug. 11, 2012
Read About Our Process
In a world of wild talk and fake news, help us stand up for the facts.