Fine-tuning tax returns

Fine-tuning or dicking around, whichever you prefer.  It looks as though Mitt and Ann Romney's accountant came up with a set of figures that are more favorable politically. 

Mitt Romney paid $1.9 million in taxes on $13.69 million in income in 2011, most of it from his investments, for an effective rate of 14.1 percent, according to hundreds of pages he released Friday in a move to quiet political controversy over his personal finances.

The Republican presidential nominee could have paid less in taxes, but he engineered his 2011 returns to overpay the government to ensure that his effective tax rate would “conform” with his statement last month that he had paid at least 13 percent, according to his trustee, R. Bradford Malt.

Romney did that by not taking full advantage of his charitable deductions. In their joint return, he and his wife, Ann, listed $4.02 million in donations to charity last year — nearly 30 percent of their income — which substantially reduced their tax obligation. They claimed a deduction for only $2.25 million of those contributions.

Had the Romneys deducted all of their charitable donations, they would have paid about $467,000 less in taxes for an effective rate of 10.55 percent, according to an analysis by Rebecca Wilkins, a tax lawyer with the Citizens for Tax Justice. ...WaPo

As any taxpayers knows, a) 10.55% is a sweet number, and b) you can amend your tax returns later to recoup the 3% extra you paid in order to achieve, temporarily, the more politically attractive 13+ %.  In other words, the Romneys' tax rate is a (still scandalous) 13+% for present purposes but will revert to that spectacular 10+% some time after the election.

Romney is dismissive of the implications.  He thinks he's a swell guy beleaguered by jerks.

In August, he told reporters, “The fascination with taxes I’ve paid I find to be very small-minded compared to the broad issues that we face.” ...WaPo

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Seth Hanlon has some questions about Mitt Romney's tax returns at Think Progress.  He ends with this:

Romney’s lack of transparency on his tax returns is especially troubling given that he is similarly evasive on the details of his tax policies. From what we know about his tax plan, Romney would shower massive tax breaks on the wealthiest Americans, which means that it can only adds up with a major middle-class tax hike. How much will Romney raise your taxes in order to cut taxes for people like him? That’s the biggest unanswered question of all.

Comments

[john andres]

For a guy, whose business model at Bain was totally financially, dependent on the IRS allowing him to deduct the intrerest on Bains' leveraged takeovers, For him now to talk about the 47%. The gop can't survive without the current tax code staying like it is. That is the whole enchilada.

[PW]

Very good point, John, and one that needs to be reiterated until we do something about our tax code. It's called a tax code, of course, because it can only be interpreted by people who make money interpreting it.