Counterparties: Mitt overpays to keep his word
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As of this afternoon, Mitt and Ann Romney’s 2011 tax returns are now public. As if you needed any reminder of how mind-numbingly complex the financial details of a man worth $250 million are, that means returns for Mitt and Ann Romney, along with their¬†estimated return,¬†which was completed in January and allowed them to be granted an extension, the Mitt Romney Trust, the Ann Romney Trust, and the Family Trust. A summary statement from Romney’s trustee, Brad Malt, and a letter from Romney’s tax preparers, PricewaterhouseCoopers, were also released.
In total, it’s thousands of pages of tax arcana — far beyond your average 1040. But simplicity was not what anyone was expecting from a man whose $13,696,951 in income puts him in the top 0.01 percent, as the NYT’s Annie Lowrey highlights.
The Romneys paid¬†$1,935,708 in taxes on that income, for an effective tax rate of 14.1%. Oddly, Romney could have paid even less, but chose to deduct only $2.25 million of just over $4 million in charitable donations. Why under-deduct? BuzzFeed’s Zeke Miller asked the Romney campaign and they said¬†that Romney “was in the unique position of having made a commitment to the public that his tax rate would be above 13%. In order to be consistent with that statement, the Romneys limited their deduction of charitable contributions”.
In effect, before releasing their tax returns, the Romneys reduced the size of their charitable deduction so their effective tax rate would conform to Mitt’s previous statement that’d he’d never paid less than¬†13% in taxes. (Had he claimed the full $4 million deduction, their effective tax rate would have likely been around 12%.) The release also combines taxes and donations, which the NYT’s David Firestone says doesn’t add up: “charity and taxes cannot be conflated to make it sound like you are ‚Äúgiving away‚ÄĚ a larger portion of your income than you are”.¬†While it¬†fulfilled¬†one pledge, Romney’s under-deduction means he overpaid his taxes in 2011. And he’s previously said that if he overpaid his taxes, he wasn’t qualified to be president.
In comparison, the Obamas paid $162,074 in taxes on¬†$789,674 in 2011 income, a 20.5% effective rate.
Also released today, medical disclosures for¬†Romney and running mate Paul Ryan¬†revealed them to be in freakishly good shape, describing Romney as a “vigorous man” with “reserves of strength, energy, and stamina that provide him with the ability to meet unexpected demands”. — Ben Walsh
On to today’s links: