Month: September 2012

The Mittens Tax Debacle

Today, Mitt Romney released his 2011 Tax Returns. That’s great- it’s what politicians should do. I’m an advocate for tax return releases because there are federal consequences for lying on them, and there aren’t on the campaign trail. That means a candidate cannot misrepresent their success and contributions to the government for gain.

The 2011 tax return was largely unremarkable. The only point that raised eyebrows had to do with charitable contributions. Earlier this year, Romney reported that he would not be paying less than 13% in taxes. However, had he claimed the full deduction for the $4 million Romney gave to charity last year, he would have come in at around a 10.5% tax rate. As a result, he only claimed a portion of his charitable giving. In other words, he paid more taxes than was required in order to line up with his original estimate.

Why did this raise eyebrows? Because in July, when questioned about his taxes, he had this to say:

I don’t pay more than are legally due and frankly if I had paid more than are legally due I don’t think I’d be qualified to become president. I’d think people would want me to follow the law and pay only what the tax code requires.

So you’re saying that someone who pays more taxes than they are required to is not qualified to hold the office that you are running for? Ok, good to know. Thanks for releasing that 2011 tax return. Should help us out in selecting a qualified president.

Ignoring Romney’s billionth foot-in-mouth moment, there was still that lingering question about his tax returns prior to 2010- and his 2009 returns, in particular. To respond to these concerns, the Romney campaign released a notarized letter from PriceWaterhouseCooper- the firm that handles Romney’s taxes- summarizing his taxes for the past twenty years. Here’s what it told us:

  • Romney, in each year, had no effective federal personal tax rate lower than 13.66%.
  • The average annual tax rate for Romney was 20.2%.
  • On average, the Romney’s donated 13.45% of their income to charity.

That sounds pretty comforting, except….

  1. His 2011 and average annual tax rates are still lower than the payroll tax rate. Why does it matter? Earlier this week, comments from a Romney fundraiser were released where he claimed that 1) the only people that vote for President Obama are the ones that don’t pay taxes [I disprove this argument, btw], and 2) those people have no sense of personal responsibility. What he forgot to mention was that over 20% of those individuals pay the federal payroll tax, and that tax rate, at 15%, is higher than what he pays, adding insult to injury on his attacks on the character of those receiving government aid.
  2. This does not tell us if any of the returns were refiled, and if they were, when the refiling took place. Several jouI rnalists have begun to ask the Romney campaign for such information, but no answers have been given to date. Why is this significant? It is entirely possible- particularly in 2009, assuming likely losses from 2008 being carried forward- that Romney initially paid no taxes at all. Refiling would remedy that PR nightmare. The same applies to any given year in the track record actually; if any percentage paid was too low to be publicly satiable, the changes would have been fairly easy to make, but would also explain the delay in disclosure.
  3. It has been widely speculated that any gains made by Romney in 2009 were the result of short selling various stock. While a perfectly legal practice, such a revelation would fly counter to Romney’s gusto for American business (hard to exude confidence when you contributed to plummeting stock prices), and potentially piss off so larger donors. None of the information released answers these questions. It’s not information he’s required to release, and frankly, it’s not a huge deal to me, but from a campaigning perspective, had this information been released MONTHS ago, they could have dealt with an issue before it had a chance to cause problems, and fester into heated accusations.
  4. It tells us that a great deal was given to charity, but the charitable funnel is an organization called the Tyler Charitable Foundation. No big deal, right? Wrong. The Tyler Charitable Foundation, in 2010, provided funding to a grouping of “pro-marriage” (read: anti-LGBT rights) groups, including one whose leaders who compared LGBT activists to Al-Qaeda. THOSE returns are substantial, because they reflect on the values of Romney, and gives insight into where he’ll stand on social issues.
  5. This was just NOT strategic. It was a transparent attempt to deflect attention from his two week stretch of gaffes, which is understandable, but the insistence on releasing a SUMMARY, instead of the ACTUAL RETURNS, is a  gaffe in and of itself. We’d all but stopped talking about it, and Romney decided to drudge it up again this close to the election by reaffirming opposition to releasing returns? Inexplicable.
  6. So, this may just be me, but having worked in the industry that was royally screwed over last year by PWC’s incompetence in the MFGlobal case, I have a hard time putting a ton of stock in a anything they say or do. But that’s just me.

Overall, this was a ploy, and a badly executed one, at that. That entire campaign needed to be gutted circa the London trip- what a fiasco.