9 things you must know about Mitt Romney's Tax returns

[librechik]

http://www.motherjones.com/mojo/2012/09/mitt-romney-tax-returns

great article!

snip

"Romney still pays taxes on his sons' enormous trust funds. David Cay Johnston, a Reuters columnist, tax expert, and Pulitzer Prize winner, tells Mother Jones that without the taxes Romney paid on his sons' trust funds, which are worth around $100 million combined, "his rate would be much lower."

Romney's advisers used an odd method to calculate how much he paid over the past two decades. As the Washington Post's Greg Sargent reported, Romney's advisers averaged his tax rates over 20 years to get a number for his tax burden over that period. But it would have been more accurate to take Romney's total tax paid over that period and divide it by his total earnings to get a new percentage. Sargent spoke to Roberton Williams, a senior fellow at the Tax Policy Center, about this problem:

"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."

Romney and other private equity managers get a tax break for earning investment income, but tax reform advocates think a lot of their "investment income" is really labor income. Romney has saved a lot of money over the years with the carried interest exception, a loophole that allows private equity managers—i.e., the people who run private equity funds, not the people who invest in them—to treat part of what they're paid in fees as investment income, even though they didn't necessarily invest the money. Often, this results in people like Romney paying a 15 percent tax rate on income that would otherwise be taxed at 35 percent. They "pretend their labor income is really investment income by calling it 'carried interest' and paying at a low rate," explains Slate's Matt Yglesias. (It's perfectly legal.)"


yes it's the legal stuff that's the problem!

more at link

[SickOfTheOnePct]

1. I'm not a big fan of averages

for the very reasons laid out in your post. I would prefer to see the returns, but if he just isn't going to do that, then he should have released effective rate year by year.

[kentuck]

2. Absolutely!

I suppose that is why he released 20 years? So he could average them in just such a way. He is such a sneaky bastard.

[awake]

4. we only asked for 12

It does seem that if he only averaged less then it would not have looked so good

[imanamerican63]

3. 9 More reasons not to vote for the 47% blabber mouth!!!!!!

"EDIT this" 100% blabber mouth!!!!!!!