Whose financial activities tell us what’s wrong with America — Mitt Romney’s or Newt Gingrich’s?
Romney released some tax returns this morning. In 2010, Goldman Sachs, one of the Romneys’ investment firms, reported that a trust set up for Ann Romney booked a $17,728.21 profit on the sale of stock in Novo Nordisk, a global pharmaceutical company based in Denmark. The Romneys paid a 15 percent federal tax levy on this capital gain, or $2,659.23.
Romney’s Novo investment was unremarkable. It was a tiny part of his portfolio. It catches the eye only because Gingrich, too, made cash off Novo Nordisk in recent years — just in a different way.
As the New York Times reported last month, Novo Nordisk paid $200,000 annually to be a big part of Gingrich’s “Center for Health Transformation.” Novo paid Gingrich separately, too, for lobbying in all but name.
What did Novo want? It wanted Gingrich to wring money from the U.S. government. The Times says:
Mr. Gingrich’s health center went on to help Novo Nordisk create a national diabetes campaign, and worked to shape government policies toward the disease. According to a presentation by a Gingrich aide to health care executives in 2004, the [Gingrich] center was “working to insure” that Medicare covered insulin products manufactured by Novo Nordisk, and Mr. Gingrich planned to meet with members of Congress “to help them develop priorities” on fighting diabetes.
Novo now boasts that its headliner diabetes drug, Victoza — the one that southern celebrity chef Paula Deen is hawking – is covered by Medicare.
This coverage — a key part of Novo’s strategy — could cost the taxpayer a pretty penny. The New York Post’s Steve Cuozzo, a diabetes sufferer, says Victoza can cost $500 monthly.
If we measure a person by taxes alone, Gingrich is the better presidential candidate. Gingrich made his Novo money by, well, working. It follows that Gingrich paid the ordinary income-tax rate — a rate twice as high as what Romney paid for investing in Novo stock.
Yet it is Gingrich, not Romney, who has created a huge liability for the U.S. taxpayer.
Okay, let’s say, for the sake of argument, that the capital-gains tax rate is too low relative to the regular income-tax rate. All that will happen is that someday, probably soon, the government will raise the capital-gains rate and get its money back anyway.
It’s not as easy to unwind what Gingrich has done. Gingrich’s lobbying — er, non-lobbying — activities have helped to turn much of the “private sector” into just another arm of the government.
These activities push the cost of health care up. Gingrich has perpetuated the idea that the government, not individuals, should pay for health care, even if that care is needed at least in part because of a lifestyle choice (see Paula Deen).
How Gingrich has made his money in the past decade carries a much more pernicious and long-term cost to the U.S. taxpayer and citizen than does how Romney made his money.
And it’s Gingrich’s activities, because they eventually push costs and taxes up for everyone, that it make it more difficult for a working-class person to get a new job if Mitt Romney’s private-equity successors lay him off (hey, Mitt — you’re welcome).
To be sure, the financial industry’s whole-scale takeover of the U.S. economy hasn’t been a good thing. Romney benefited from it, even if he didn’t invent it.
But Gingrich’s own industry — what Romney yesterday called “influence peddl[ing]” — and its similar takeover of the U.S. economy has been worse.
— Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.