I agree with Maryland Governor Martin O’Malley that Mitt Romney’s time as governor deserves as much scrutiny as his Bain Capital days. And on that score, Democrats are telling a story about Massachusetts’ woeful job creation record – 47th out of the 50 states – in Romney’s one term.

But Romney is running on his business acumen and business experience, so that shouldn’t exactly stay out of the conversation. And I do think that Romney’s personal record does merit consideration when that record intersects with public policy. That’s very salient when it comes to his effective tax rate.

Romney addressed this today, and made an explicit defense of the 15% capital gains tax rate, from which he benefits significantly and which can be blamed for the stunning rise in inequality in America.

ROMNEY: I also think that the Speaker’s plan to eliminate the capital gains tax for high-income individuals–capital gains, interest, and dividends–would not only be a very expensive decision in terms of having to fill an even larger budget, but would provide people with very high income the possibility of no tax at all. You’d have individuals — the Warren Buffet argument — Warren Buffett, Bill Gates would probably pay no taxes at all. And today they probably pay 15 percent. Very high-income people in this country probably pay 15 percent taxes if their resources are coming from investments. And under their plan it would go to zero.

I just don’t think that’s the right course. With our precious dollars, we should focus on providing relief, tax relief, in two areas: one is for middle-income Americans, who have been hurt the most, and the other is to bring our corporate rates to a level where we could draw people from other countries to bring their funds back in this country.

QUESTION: What’s the effective rate you’ve been paying?

ROMNEY: What’s the effective rate I’ve been paying? It’s probably closer to the 15 percent rate than anything, because my last 10 years, I’ve, my income comes overwhelmingly from investments made in the past, rather than ordinary income, or rather than earned annual income. I get a little bit of income from my book but I gave that all away. And then I get speakers’ fees from time to time but not very much.

Romney is actually expressing the populist position here, relative to the rest of the Republican field, most of whom want to eliminate the capital gains tax. But he’s also telling you how he benefits from that historically low rate, which allows him to keep more of his money earned off investment income, over twice as much as a percentage than a working stiff earning a salary. Romney would tell you that those low rates enticed him to invest, and those investments aided the economy. But he also tells you those investments are years and years old. It’s not clear there’s anything dynamic going on here. It’s just a rich man sitting on his cash and shielding the income from the federal government, where it could get put to productive use. And that drives inequality upward, because it starves funding for redistributive policies.

Romney would also tell you that a low capital gains rate makes sense, because the federal government wastes money, and people should be allowed to keep it. This is undermined by his light populism on eliminating the capital gains tax, which he admits has a purpose and a function. Furthermore, the greatest period of prosperity in American history came in a period of high tax rates and compression of inequality, where productivity gains and economic growth were broadly shared. Nothing distorts that more than a low, low capital gains tax rate.

And Romney knows this can be put to use against him in the general election, because he won’t release those tax returns until he fudges the 2011 tax year to increase his effective tax rate. But moreover, he’s telling you by his actions, not his words, that he believes the rich should have a specially privileged tax rate on the way they earn their money.