Mitt Romney has promised throughout the campaign that he would eventually release his 2011 tax returns, in addition to the 2010 materials he made available earlier in the year. Apparently, today’s the day.
At the surface, we learned this afternoon that Romney had an income of about $13.7 million last year – not bad for a guy who hasn’t had a day job at any point in the last six years – and paid roughly $1.9 million in taxes, for an effective tax rate of 14.1 percent.
That means Romney, despite vast wealth and no job, pays a lower effective tax rate than most of the middle class. But in this case, there’s more to the story.
Mitt and Ann Romney also donated about $4 million – about 30 percent of their income – to charity in 2011, though they only claimed a deduction of about $2.25 million from those donations, according to the campaign.
That means the Romneys voluntarily paid a higher tax rate than they were legally required. The full documents, which only cover the 2011 tax returns, will be posted online at 3 p.m. today.
This can get a little complicated, so let’s be clear about the details. If Romney had simply filed normally, taking all of the deductions to which he’s legally entitled, he would have paid an effective tax rate of about 9 percent.
But that would have proven politically problematic, so purely for show, he deliberately overpaid the IRS, in order to increase his tax rate, on purpose. Romney was in the rather extraordinary position of selecting his own preferred tax rate, and then working backwards from there.
In other words, Romney chose to under-deduct and overpay his tax bill because he’s running for office for Pete’s sake. That’s not my argument; that’s the Romney campaign’s argument.
In January, Romney insisted, “I don’t pay more than are legally due and frankly if I had paid more than are legally due I don’t think I’d be qualified to become president.”
By this standard, Romney has now effectively disqualified himself.
Asked about the conflict between his statement in January and his actions in September, the Romney campaign said he “was in the unique position of having made a commitment to the public that his tax rate would be above 13%.”
So, Romney said he’d be unqualified to be president if he paid more than is legally due, and then he paid more than is legally due, because of a “unique position.” (In this context, it appears that “unique position” is now synonymous with “behind in the polls.”)
As Jamison Foser added, even after paying more than he had to, and effectively picking his own rate, Romney still enjoyed a lower rate than much of the middle class.
All of this, of course, only refers to 2011. What about the previous years and the returns Romney has but won’t disclose? They’ll remain hidden for reasons the Republican campaign won’t explain, but as part of today’s release, Romney sought to prove he never paid zero percent – as Harry Reid claimed – by releasing a letter from his tax advisers summarizing his tax bills from 1990 to 2009. According to the letter, Romney also paid at least 13.66 percent over the two-decade period.
But much of this is still based on a “trust me” premise – we don’t have any proof to substantiate the summary, and the letter offers no information about various tax shelters and overseas investments.