Democrats, Media Get Punk'd: Romney Releases Tax Returns

[_Kevin Graham]

As bad as this source is, it at least doesn't screw the facts up as badly as Droopy, who seems to think Miit Romney actually did release his "tax returns."

No, he released a "letter" that made some claims about his tax returns, and we're just going to have to take that report at face value since we're not going to be given the actual tax returns, as promised by Ann Romney.

------------------------------------

WASHINGTON -- Mitt Romney on Friday released a letter from his tax accountant, PricewaterhouseCoopers, promising that Romney paid an "average annual effective federal rate" of 20.2 percent over 20 years. The number is being released instead of the tax returns themselves, and is being used to rebuff Senate Majority Leader Harry Reid's charge that Romney didn't pay taxes over a 10-year period.

But it is a meaningless figure.

According to the letter from PwC avowing the number, it is based on Romney's adjusted gross income. That means that, for instance, if Romney made investment profit of $20 million, but had losses of, say, $19.9 million, his adjusted gross income would only be $100,000. Paying 20.2 percent of $100,000 would cost Romney just over $20,000.

If Reid's comment is interpreted strictly -- that Romney paid literally $0 in taxes over 10 years -- then the PwC letter undermines that charge. But if Romney paid only a very small amount -- say, $20,000 on $20 million -- it would be hard to award Reid many pinocchios for calling that nothing.

Such a low-payment scenario is considered quite plausible by tax experts, who noted that investors can pick which investments to realize each year to maximize their tax benefit. In a year such as 2008, when the global markets tanked, an investor would likely have more than enough losses to offset gains. Indeed, Romney's 2010 tax returns show a carryover capital loss credit, meaning he had more losses than he could use the year before.

In other words, without seeing Romney's actual return -- or at least without knowing what Romney declared as his adjusted gross income -- it's impossible to know if the rate he paid bears any relation to Romney's economic reality.

"His poor father must be so embarrassed about his son," Reid (D-Nev.) told HuffPost earlier this summer, in reference to George Romney's standard-setting decision to turn over 12 years of tax returns when he ran for president in the late 1960s.


Reid said a Bain investor had told him that Romney paid no taxes over a decade

"Harry, he didn't pay any taxes for 10 years," Reid recounted the person as saying.

"He didn't pay taxes for 10 years! Now, do I know that that's true? Well, I'm not certain," said Reid. "But obviously he can't release those tax returns. How would it look?"

Romney's claimed rate is misleading in another way. Boston College tax law professor Brian Galle noted that Romney's IRA has grown since 1999 at a rate of roughly $9 million to $10 million per year. Yet he pays no taxes on those gains. Adding $10 million to his 2011 income of $13.8 million, for instance, nearly doubles it, meaning his tax rate is roughly half of what his real gain was.

"Mitt Romney was paid an immense amount for services rendered and is not putting it in his income. ...To say he has a 14 percent rate doesn't capture the economic reality of what's happening," Galle said. "It's more like Romney has a salary of $10 million and he's paying 14 percent on $1 million and the rest just isn't included."

The Washington Post's Greg Sargent identifies a third reason the average of 20.2 percent is meaningless. As the campaign told Sargent, it's an average of rates, rather than the simpler and more accurate calculation, which would divide his total earnings by his total taxes paid.

If Romney paid his lowest rates in a number of the higher income years, the overall 20 percent figure would overstate the rate he actually paid over the whole period. Williams provided the following purely hypothetical example:

“Let’s say you have 10 years in which you paid 13 percent in taxes, and 10 years in which you paid 27 percent,” Williams told me. “If you average those rates, you’ll get an overall rate of 20 percent. But if the 13 percent years were high income years, and the 27 percent years were low income years, then his total taxes paid as a share of total income over the 20 years would be less, perhaps significantly less, than 20 percent.”

Yet in that scenario, the Romney campaign would be claiming, by its chosen metric, to have paid 20 percent.

Romney would have been better off sitting on this "letter" along with his tax returns.

[_krose]

Right, punked.

Because late Friday afternoon is definitely NOT the time when people release things they want to bury. That's when they release information they want to trumpet to the world.

Sure.

[_krose]

Hilarious. Romney didn't take all the deductions he was legally entitled to take in order to not pay less than the 13% he claims was the lowest rate he'd ever paid. So he paid more taxes than he had to, making him, by his own words, unqualified for president.

Don't forget -- as soon as the election is over (win or lose), he will likely file an amended return and claim the entire deduction, thus getting the money back. Essentially, he has given his campaign a short-term personal loan of around $200K, for the purpose of making sure his earlier statement -- that he never paid less than 13% -- would be true. Because without this maneuver, his effective rate would have been 12%.

[_Bond James Bond]

Right, punked.

Because late Friday afternoon is definitely NOT the time when people release things they want to bury. That's when they release information they want to trumpet to the world.

Sure.

Paul Ryan as VP was dropped Friday around midnight :D

Also tax return as was already said. How about 2000-2009?

[_bcspace]

Hilarious. Romney didn't take all the deductions he was legally entitled to take in order to not pay less than the 13% he claims was the lowest rate he'd ever paid. So he paid more taxes than he had to, making him, by his own words, unqualified for president.

This guy can't win for losing.

The problem with such logic is that "legally due" depends on how the forms are filled out in the first place.

[_beastie]

Hilarious. Romney didn't take all the deductions he was legally entitled to take in order to not pay less than the 13% he claims was the lowest rate he'd ever paid. So he paid more taxes than he had to, making him, by his own words, unqualified for president.

This guy can't win for losing.

The problem with such logic is that "legally due" depends on how the forms are filled out in the first place.

Yes, we must define "is" first.

by the way, in regards to this thread's title, if Romney could punk the Democrats by releasing his tax returns, he would have done so long ago. The obvious reality is that releasing them would be far more damaging than not releasing them, so he is not able to "punk" anyone. The best he can do is artificially lower his tax rate so he isn't immediately labeled a liar. See, that's what happened when he ran for governor and asserted he'd never claimed Utah as his primary residence. Oh yeah, he punk'd everyone then, too.

http://www.pensitoreview.com/2012/08/08 ... -race-too/

As George Will said about Mitt Romney’s refusal to release his tax returns, “The cost of not releasing the returns are clear. Therefore, he must have calculated that there are higher costs in releasing them.” Last week we learned that whatever it is he is hiding may not be new.

Rachel Maddow and her producers did a little digging and found that, in 2002, when he was running for governor of Massachusetts, Romney was equally adamant that he would not release his tax returns. A key issue then was Romney’s eligibility to serve as governor. Massachusetts law requires that in order to serve as governor, candidates must have resided in the state for the previous seven consecutive years. Because Romney had lived in Utah full time while he ran the 2002 winter Olympics in Salt Lake City, it seemed obvious he did not meet that requirement.


One way to tell for sure would be to see which state, Massachusetts or Utah, Romney listed as his primary residence on his IRS forms. Romney and his adviser, Eric “Etch-A-Sketch” Fernhstrom vehemently denied that Romney had filed as a full-time resident of Utah. It was later revealed they were lying — Romney had amended his returns to change his claim of full-time residency in Utah to full-time residency in Massachusetts — retroactively.

[_beastie]

The fact that a Romney spokesperson openly admitted this:

Romney attorney Brad Malt said the Romneys took a deduction of only about $2.25 million. He said the move was meant to keep their effective tax rate above a 13 percent minimum level that Romney said recently his rate had stayed above for 10 years.

"The Romneys thus limited their deduction of charitable contributions to conform to the governor's statement in August," Malt said in a statement.

http://www.chicagotribune.com/news/poli ... 0757.story

means they don't really understand the problem some people have with his tax returns. The problem isn't that we want Mitt, in particular, as an individual, to pay a higher tax rate than 14%. The problem is that someone as wealthy as Mitt Romney legally is entitled to an extremely low tax rate in the first place. If he had taken all his deductions, his tax rate would have been around 10%. It's the problem Warren Buffet highlighted. Someone as wealthy as Mitt Romney should not pay a lower tax rate than a secretary.

I don't think Mitt understands this. Which, in my opinion, is why he's unqualified to be president, not because he didn't take his full deductions (which he said would disqualify him).

[_MeDotOrg]

The problem isn't that we want Mitt, in particular, as an individual, to pay a higher tax rate than 14%. The problem is that someone as wealthy as Mitt Romney legally is entitled to an extremely low tax rate in the first place. If he had taken all his deductions, his tax rate would have been around 10%. It's the problem Warren Buffet highlighted. Someone as wealthy as Mitt Romney should not pay a lower tax rate than a secretary.

I don't think Mitt understands this. Which, in my opinion, is why he's unqualified to be president, not because he didn't take his full deductions (which he said would disqualify him).

Well said. In many ways, Romney is the worst candidate for the GOP because his personal story draws attention to the gross inequities of the tax code. It's one thing to hear the theoretical implications of the tax code, but when proplr see a concrete example, it really drives the point home.

[_krose]

The fact that a Romney spokesperson openly admitted this:

Romney attorney Brad Malt said the Romneys took a deduction of only about $2.25 million. He said the move was meant to keep their effective tax rate above a 13 percent minimum level that Romney said recently his rate had stayed above for 10 years.

"The Romneys thus limited their deduction of charitable contributions to conform to the governor's statement in August," Malt said in a statement.

And I'm sure attorney Malt came up with this idea all on his own. After all, he's the guy who manages their "blind trust" for them.

[_Droopy]

As bad as this source is, it at least doesn't screw the facts up as badly as Droopy, who seems to think Miit Romney actually did release his "tax returns."

No, he released a "letter" that made some claims about his tax returns, and we're just going to have to take that report at face value since we're not going to be given the actual tax returns, as promised by Ann Romney.

------------------------------------

WASHINGTON -- Mitt Romney on Friday released a letter from his tax accountant, PricewaterhouseCoopers, promising that Romney paid an "average annual effective federal rate" of 20.2 percent over 20 years. The number is being released instead of the tax returns themselves, and is being used to rebuff Senate Majority Leader Harry Reid's charge that Romney didn't pay taxes over a 10-year period.

But it is a meaningless figure.

According to the letter from PwC avowing the number, it is based on Romney's adjusted gross income. That means that, for instance, if Romney made investment profit of $20 million, but had losses of, say, $19.9 million, his adjusted gross income would only be $100,000. Paying 20.2 percent of $100,000 would cost Romney just over $20,000.

If Reid's comment is interpreted strictly -- that Romney paid literally $0 in taxes over 10 years -- then the PwC letter undermines that charge. But if Romney paid only a very small amount -- say, $20,000 on $20 million -- it would be hard to award Reid many pinocchios for calling that nothing.

Such a low-payment scenario is considered quite plausible by tax experts, who noted that investors can pick which investments to realize each year to maximize their tax benefit. In a year such as 2008, when the global markets tanked, an investor would likely have more than enough losses to offset gains. Indeed, Romney's 2010 tax returns show a carryover capital loss credit, meaning he had more losses than he could use the year before.

In other words, without seeing Romney's actual return -- or at least without knowing what Romney declared as his adjusted gross income -- it's impossible to know if the rate he paid bears any relation to Romney's economic reality.

"His poor father must be so embarrassed about his son," Reid (D-Nev.) told HuffPost earlier this summer, in reference to George Romney's standard-setting decision to turn over 12 years of tax returns when he ran for president in the late 1960s.


Reid said a Bain investor had told him that Romney paid no taxes over a decade

"Harry, he didn't pay any taxes for 10 years," Reid recounted the person as saying.

"He didn't pay taxes for 10 years! Now, do I know that that's true? Well, I'm not certain," said Reid. "But obviously he can't release those tax returns. How would it look?"

Romney's claimed rate is misleading in another way. Boston College tax law professor Brian Galle noted that Romney's IRA has grown since 1999 at a rate of roughly $9 million to $10 million per year. Yet he pays no taxes on those gains. Adding $10 million to his 2011 income of $13.8 million, for instance, nearly doubles it, meaning his tax rate is roughly half of what his real gain was.

"Mitt Romney was paid an immense amount for services rendered and is not putting it in his income. ...To say he has a 14 percent rate doesn't capture the economic reality of what's happening," Galle said. "It's more like Romney has a salary of $10 million and he's paying 14 percent on $1 million and the rest just isn't included."

The Washington Post's Greg Sargent identifies a third reason the average of 20.2 percent is meaningless. As the campaign told Sargent, it's an average of rates, rather than the simpler and more accurate calculation, which would divide his total earnings by his total taxes paid.

If Romney paid his lowest rates in a number of the higher income years, the overall 20 percent figure would overstate the rate he actually paid over the whole period. Williams provided the following purely hypothetical example:

“Let’s say you have 10 years in which you paid 13 percent in taxes, and 10 years in which you paid 27 percent,” Williams told me. “If you average those rates, you’ll get an overall rate of 20 percent. But if the 13 percent years were high income years, and the 27 percent years were low income years, then his total taxes paid as a share of total income over the 20 years would be less, perhaps significantly less, than 20 percent.”

Yet in that scenario, the Romney campaign would be claiming, by its chosen metric, to have paid 20 percent.

Romney would have been better off sitting on this "letter" along with his tax returns.

Kevin, you're going to just have to work on your reading comprehension - and stop running to the mainstream media to find reporters and political hacks who are willing to spin a juicy stream of hypothetical what-ifs and conjectural ifs, whens, and whatevers to keep the smear train on its greasy tracks.

Lets go back and go over the stated, empirical facts, as stated by PricewaterhouseCoopers, again, for those, like Kevin, with reading comprehension difficulties such that multiple, slow, and careful re-readings of material such as this may be necessary to make the needed impression:

- In 2011, the Romneys paid $1,935,708 in taxes on $13,696,951 in mostly investment income.

- The Romneys’ effective tax rate for 2011 was 14.1%.

-The Romneys donated $4,020,772 to charity in 2011, amounting to nearly 30% of their income.

-The Romneys claimed a deduction for $2.25 million of those charitable contributions. The Romneys’ generous charitable donations in 2011 would have significantly reduced their tax obligation for the year. The Romneys thus limited their deduction of charitable contributions to conform to the Governor's statement in August, based upon the January estimate of income, that he paid at least 13% in income taxes in each of the last 10 years.

In short, and as Kevin noted, Romney forked over nearly $2 million to Uncle Sam last year and donated more than $4 million to charity. He overpaid his taxes by limiting the charitable deductions he chose to claim, which could have driven his obligations to government even lower. Liberals are now actually complaining that Romney intentionally paid *too much* in taxes to boost his own effective rate, due to his prodigious philanthropic giving. This line of criticism is downright hilarious. It's okay to point and laugh. And what about the last 20 years?

- In each year during the entire 20-year period, the Romneys owed both state and federal income taxes.

-Over the entire 20-year period, the average annual effective federal tax rate was 20.20%.

-Over the entire 20-year period, the lowest annual effective federal personal tax rate was 13.66%.

-Over the entire 20-year period, the Romneys gave to charity an average of 13.45% of their adjusted gross income.

-Over the entire 20-year period, the total federal and state taxes owed plus the total charitable donations deducted represented 38.49% of total AGI.

-During the 20-year period covered by the PWC letter, Gov. and Mrs. Romney paid 100 percent of the taxes that they owed.

Let's unpack these numbers. The Romneys owed and paid state and federal income taxes every single year stretching back to at least 1990. Harry Reid's imaginary friend is unavailable for comment. Their effective tax rate, on average, was over 20 percent (nearly double the average effective rate in America, according to the non-partisan Tax Foundation). Does this qualify as a "fair share"? In the last two decades, the Romney's donated 13.45 percent of their adjusted gross income to charity. This totally dwarfs the long-term giving of the Obamas and the Bidens, in case anyone in the class warfare camp is keeping score. But remember, Mitt Romney is callously dismissive and uncaring toward poor people and the '47 percent.' Overall, the Romney family paid every cent they owed -- and more -- forking over nearly 40 percent of their income to either the government or charitable organizations, including their church. I've got to hand it to the Romney campaign: They played a long game here, and did so masterfully. One of the most obnoxious and relentless arrows in Democrats' attack quiver has been the tax returns issue. See how greedy and secretive Romney is? Even his own father released 12 years of returns! He's probably a tax cheat! That's all gone now, and the whiners look petty, small, and stupid. And Mitt Romney looks like the remarkably generous, law-abiding, productive member of society that he is.

One notices that the sundry political hacks Kevin quotes above don't have actual access to Romney's original tax records (as Reid's felonious imaginary friend at Bain appears to have had), and hence, need to make wild guesses and assumptions of what Romney might have paid and what the average might have then been and what if Romney's rate in good times was and what if it had been this percentage or that percentage and if such and such was the case here and and if we consider the plausibility of this assumption and if...(and then adding his non-taxable IRA income to his taxable income and claiming this makes the stated tax return claims "misleading." ).

The scam is done. Reid's slander of a brother in the Church in his power and ego-drunken quest to protect and defend his partisan commitments and loyalties to the ensconced political class of which he is a part as a lifetime career politician has just gone of the rails. The felon at Bain, meanwhile (if he exists at all) who claims to have had access to Romney's tax records, and whoever at the IRS slipped them to him, should be facing prison time, at some future reckoning (but, really folks, Reid made this all up, and based on past conduct, it doesn't appear reasonably beyond Reid to have done so).