Friday, September 21, 2012
Mitt releases 2011 tax returns
By: John Hayward
9/21/2012 03:08 PM
As promised earlier this year, Mitt Romney is releasing his full 2011 tax returns Friday. His 2010 returns were released in January.
According to CNN, Romney “made $13.7 million last year and paid $1.94 million in federal income taxes, giving him an effective tax rate of 14.1 percent.” Both his income and tax payment were considerably lower than a thumbnail estimate he provided back in April.
Much of the Democrats’ class warfare rhetoric relies upon confusing nominal and effective tax rates. Virtually no one pays their nominal rate – there are always deductions and exemptions, many of them offered as incentives to convince citizens to do things the government finds socially useful. For example, capital gains are taxed at a lower rate than the marginal income dollars of high earners. A great deal of Romney’s income comes from such productive, job-creating investments. As CNN notes, he’s still paying a higher effective tax rate than the average American, although payroll taxes further complicate the comparison.
Romney and his wife Ann also gave $4 million to charity, but that doesn’t count, since everyone knows the only real way to demonstrate compassion is to insist that other people give more money to the government. The Romney campaign says that he didn’t even take the full deduction allowed for his charitable contributions.
Romney has long said he would release his returns for 2010 and 2011. Only recently have Democrats decided he also needs to release the returns for 2002 through 2009, a matter they portray as far more urgent than investigating what Barack Obama has done with the public treasury. Senate Majority Leader Harry Reid has disgracefully abused his office to air unfounded accusations that Romney didn’t pay any taxes at all over the past decade, claiming he was told as much by a phantasmal figure who somehow gained access to all ten years of Romney’s tax data.
The new development coming from the Romney camp today is the decision to release summary information about the past 20 years of his taxes, which demonstrate that his average annual effective rate over that period was 20.2 percent, while the lowest effective rate he ever paid was 13.66 percent. The New York Times further notes that “the Romneys gave an average of 13.45 percent of their income to charity during the period.”
Former IRS Commissioner Fred Goldberg reviewed Romney’s 2011 returns, and chose to reiterate the same statement he issued after examining the 2010 data: “These returns reflect the complexity of our tax laws and the types of investment activity that I would anticipate for persons in their circumstances. There is no indication or suggestion of any tax-motivated or aggressive tax planning activities. In my judgment, they have fully satisfied their responsibilities as taxpayers. They have done so by relying on a highly reputable return preparer and other advisors, who have in turn relied primarily on information provided by third parties to them and to the IRS.”
“The end result of that process has been returns that include a multitude of schedules, IRS forms and accompanying statements that provide appropriate transparency and the proper payment of taxes that Governor and Mrs. Romney owe under current law,” Goldberg concluded.
That should be good enough to put the “Mitt Romney dodged his taxes” canard to bed, at least until Harry Reid’s next hallucination. But of course it won’t, because the point behind all the Democrat attacks is not to confirm that Romney paid his taxes, or even pin down his effective rate. They certainly won’t care what his average rate over the past two decades was, or how many millions he’s donated to charitable endeavors.
They want to get their hands on the enormous trove of data included in his full returns – 2011 actually included three separate returns for the Romneys’ individual blind trusts and their family trust – so they can pick through it for little details they can pull out of context and drop into political attacks, secure in the knowledge that few in their audience will understand the extremely complicated tax laws governing a fortune of this size well enough to weed out disinformation, and the media certainly won’t help them do it.
To read another article about Mitt Romney releasing his tax returns, click here.
To read another article by John Hayward, click here.
Posted by Brett at 6:58 PM