NOW with Alex Wagner | August 21, 2012
>>> following in the legendary footsteps of rick perry and channeling his iner ron paul , mitt romney declared yesterday he wants to audit the federal reserve , a distinctly nonpartisan government entity, but democrats and even prominent conservatives are still waiting for him to audit himself. the romney campaign said this weekend it will release the governor's second and final year of tax returns for 2011 before october 15th , which they say will provide ample information about his finances, but the information provided in romney 's 2010 taxes has already made weekly standard editor bill kristol uneasy.
>> i personally if i was designing the tax code , would have a tax code in which mitt romney paid more than 13%, i would say given what i know about the kind of investments he made money from. i'm just not a believer that he needed, you know, there would have been any economic detriment to him paying more and i think it just seems kind of weird that he pays a lower rate than an awful lot of middle class people.
>> seems kind of weird. kristol's point turns this into a policy issue, arguing that what romney paid in taxes is relevant in the discussion of how to reform the tax code . president obama hit the very same note yesterday in the white house briefing room.
>> particularly when we're going to be having a huge debate about how we reform our tax code and how we pay for the government that we need, i think people want to know that, you know, everybody's been playing by the same rules, including people who are seeking the highest office in the land. i mean, this isn't sort of overly personal here, guys. this is pretty standard stuff. i don't think we're being mean by asking you to do what every other presidential candidate's done, right?
>> kurt, i think the president really summed it up quite neatly there. we're not trying to be mean. this is about a fundamental policy issue.
>> he's got bill kristol on his left almost. bill kristol . that's the thing, his tone was exactly right, it seems to me. of course, it's entirely politically motivated but this idea of yeah, 13% for a guy who is making $10 million, $20 million, $30 million, $40 million a year, is that fair? that seems to be the way to posit it. when you're running for president, all kinds of personal situations and your track record as a professional are part of the discussion so why not how much federal income tax .
>> especially if we're looking for tax reform . the center for american progress had a breakdown of the tax rate that average households make. households making between $30,000 and $45,000 pay 12.5% rate. households making between $45,000 and $92,000 pay a 15.7% rate. look in the middle, governor romney , who made $21.6 million in 2010 , right in the middle. 13.9%.
>> you don't need multi-year returns to know that to most people, who have to get a salary to earn a living, that something is not fair. there's no equity in the tax system where a multimillionaire pays a lesser rate because they get income from dividends and investment income that's taxed at a lower rate. now, having said that, you don't need multiple years to make the point. this is why obama wants that buffett rule so very rich people just pay more because the system is not equal. it's obvious. but there is another good government reason for wanting the returns and that is just to see really what they say and not only the strategies, but to learn more about the investments. i think the tax rate argument in a sense has been made and politically, the political thing for the democrats to enforce it, but the more lasting argument about returns is even if he paid 30% rate, that should not negate that people who want to be president should disclose their tax returns .
>> the question is, john, is an october 15th , throwing out i guess a bone to the media saying all right, here --
>> that's the legal deadline. that's when he has to have filed the taxes.
>> fair enough. in the next month, does this sort of then deal with the tax return -- does it neutralize the tax return question for mitt romney ?
>> no. i don't think so. we will see what's in the taxes when they come out. i think the tax return issue has been problematic for him and will continue to be problematic for him. the reasons are not because of what rate he pays and i think there's a really interesting argument to be made about tax policy , about how you want to tax capital gains , carried interest, all that stuff. that debate has been raging for a long time through the reagan administration . now the ryan budget actually wants to zero out capital gains tax entirely so that --
>> in fact, romney would pay .82% on his $21.6 million under the ryan plan. .82%.
>> let me finish the point. there's a great policy debate to have that really almost has nothing to do with mitt romney 's taxes except that his taxes -- we can point to any rich person in america that makes money through capital gains and make that same point. i think the reason it doesn't matter on october 15th or anything else is what's toxic about the romney tax returns is not the rate he pays, or how much money he makes. it's two words. three words. cayman islands , swiss. to most --
>> swiss bank accounts . five words.
>> those are the things for most average americans , most average americans think rich people game the tax code . what freaks them out is the notion that there's a guy running for president who sounds like a bond villain or a drug cartel kingpin who is like that's what most average americans think are people who put money in swiss bank accounts or park money in the cayman islands . that's weird.
>> october 15th thing is nuts. doesn't matter what the deadline is. i just think they have been totally suicidal in the way they handled this. we will find out on october 15th that he paid a 99.9% mergeable rate for 2011 but that's just going to leave open the question of the other, what, eight years or ten years they're looking for. there's just no way around it. he's just procrastinating. the whole thing, he could have ripped this band-aid off in 2009 and chose not to and it just keeps going on.
>> this goes back to the strategy here. we are not talking about the economy. we are talking about forcible rape, we are talking about medicare and talking about --
>> secret income taxes . and secretions.
>> i think it's just a point, and this is what the democrats know that perfectly legal tax avoidance strategies and schemes just don't sit well with everyday people who just have no way to why these options to lessen their taxes --
>> cayman islands , swiss bank accounts . those five words you may see on an obama campaign sweatshirt. coming up, tension within