- Mitt Romney wrote an op-ed calling for higher taxes on wealthy Americans.
- Romney wants to significantly raise taxes on employee payroll, capital gains.
- Economists say the reforms would hurt economy more than increase revenue.
Mitt Romney thinks it’s time for the GOP to become the party of “tax the rich.”
In an opinion article for The New York Times, published on Friday, the former U.S. senator from Utah, and one-time Republican nominee for president, said his change of heart was prompted by the urgent need to address the country’s debt crisis.
“Today, all of us ... truly are headed for a cliff,” Romney wrote, later concluding: “And on the tax front, it’s time for rich people like me to pay more.”
What is the national debt?
The national debt has risen by $15 trillion since 2020 to $38 trillion, with that number expected to grow by $1 trillion every few months as interest payments continue to snowball.
In 2024, the amount the U.S. spent simply to finance its debt eclipsed the defense budget for the first time. Interest costs are expected to eat up $14 trillion over the next decade.
If Congress does nothing, Romney said, “economic calamity will almost certainly ensue.”
Romney envisions the following scenario: By 2034, the Social Security Trust Fund is projected to run out. When it does, the federal government will likely try to borrow trillions of dollars to cover the lost benefits.
But if lenders demand much higher interest rates from their erratic U.S. partner, and if the government prints off more new money to cover the costs, then recession and hyper-inflation could spiral out of control.
What does Romney propose?
As a senator, Romney spearheaded conversations about forming “rescue committees” to make bipartisan plans to resolve budget shortfalls. Now in his retirement, Romney continues to call for both parties to compromise.
“Typically, Democrats insist on higher taxes, and Republicans insist on lower spending,” Romney wrote. “But given the magnitude of our national debt as well as the proximity of the cliff, both are necessary.”
However, Romney’s 900-word piece includes just one paragraph on spending cuts.
He recommends making Social Security and Medicare “need-based” to limit benefits for future wealthy retirees, and raising the age of eligibility for these programs in line with longer American life expectancy.
The bulk of Romney’s article is devoted to tax increases.
The largest would be raising the limit on how much income can be taken by the government for the 12.4% federal payroll tax. In 2025, income beyond the first $176,100 was not taxed for Social Security.
Romney also proposes crushing what he calls tax “‘caverns’ or ‘caves’” that “insulate multibillionaires.” They include policies that exclude inherited stocks and profitable real estate properties from the 24% capital gains tax.
Will increased taxes fix the debt?
Romney frames these tax reforms as a way to increase government revenue in the face of a crushing financial outlook. But the consensus of many economists is that American debt is fundamentally a spending problem.
“There’s no mathematical way to tax our way out of the fiscal crisis that’s in front of us,” said Adam Michel, the tax policy studies director at the libertarian Cato Institute, in an interview with the Deseret News.
Federal discretionary spending has increased dramatically since the Great Recession and COVID-19 pandemic. And the cost of entitlement programs is accelerating at an ever-greater rate.
Romney’s proposal to means-test welfare programs and raise the retirement age “might not go far enough,” and his recommendations on raising taxes would have “dramatic economic consequences,” according to Michel.
The U.S. already has one of the most progressive tax systems in the developed world, Michel said. Removing the payroll cap would add 12% to the top marginal income tax rate of 37%, meaning America’s top earners would lose half of their income to taxes each year.
“That would be ... one of the most significant tax increases in modern history,” said Judge Glock, the director of research at the conservative Manhattan Institute. “At that point, we would be pushing the limits of what taxes could actually do to raise more revenue.”
Michel and Glock both said that Romney’s other proposals, to remove tax benefits for certain investments, would discourage economic growth, and would bring in relatively small amounts of revenue.
Many of these so-called “tax loopholes” are intentional policies to encourage investment in the parts of the economy that are most important for wage growth, job creation and economic dynamism, Michel said.
“So you’re not getting a lot of bang for your buck,” Michel said. “You’re getting a pretty significant negative economic hit and ... it’s focusing on the wrong thing. The problem is not that we don’t tax the rich enough, the problem is on the spending side.”
Will Congress act?
America’s debt crisis can only be avoided if lawmakers make Social Security and Medicare sustainable long-term, but increasing taxes on capital gains could be a way to bring Democrats to the table, Glock suggested.
In response to Romney’s op-ed, Utah Democratic Party Chair Brian King said in a post on X that he is glad to see the once-Republican-standard-bearer come around to “the need to tax the rich at greater levels.”
During his 2012 run for the presidency, Romney famously told donors that the 47% of the country who pay no income tax were guaranteed to vote Democratic because they are “dependent upon government.”
On Friday, Romney, who is worth an estimated $100-$300 million, said if the GOP wants to be the party of working-class opportunity, the party that restores confidence in capitalism, then it should get over its aversion to tax increases.
“I believe in free enterprise, and I believe all Americans should be able to strive for financial success,” Romney said. “But we have reached a point where any mix of solutions to our nation’s economic problems is going to involve the wealthiest Americans contributing more.”