fidesquaerens (marta_bee) wrote,
fidesquaerens
marta_bee

showing us the money

I try not to comment on horse-race politics (try, not always succeed!), and if anything qualifies the scandal over Romney's tax returns certainly qualifies. But there's something interesting buried in the details here.

Romney just released his 2011 tax return:

http://www.mittromney.com/disclosure/mitt/tax-return/2011/wmr-adr-return

According to his 1040 form:
  • His total income was $13,709,608.00
  • He claims his tax liability is $1,935,708.00
  • He claimed a deduction for $2,250,772 in gifts to charity
That means he paid 14.1% tax rate. For perspective, according to Wikipedia, people in the middle quintile (avg. $64,500) pay an effective income tax rate of 12.7%; in the fourth quintile (avg. $94,100), it's 15.7%. And that's the effective tax rate, after you've taken advantage of any loopholes. Looking at the actual published rates, you'd have to earn less than $8,700 a year if single, $17,400 if married filing jointly, to get a tax less than that amount.

Those numbers are a bit rage-inducing. Since I tend not to deduct charitable giving because as a matter of principle I believe we shouldn't be trying to cheat Uncle Sam, I probably pay a higher tax rate than Mitt Romney did. I'm a grad student on a grad student stipende, so while I'm not poor by my neighborhood's standards, if you compared me to what most other thity-year-olds with my level of education are earning, it's pathetic.

But I want to move beyond rage, because here's where it gets really interesting. As Bloomberg reports,

Romney claimed tax deudctions for $2.25 million of the $4 million he made in charitable contributions in 2011, his campaign said yesterday before releasing his tax returns. The decision to pay more in taxes than necessary was political. Romney had told reporters that he hadn't paid an effective rate of less than 13 percent over the past decade, in an effrot to deflect Democratic attacks.

Looking at tax forms gives me a first-class headache, so maybe someone could clarify just what rate he would have owed, if he'd deducted the full $4m. I have seen various news stories claim this would have put his tax rate in the single digits.

Here's what's so interesting, though: in the one year Romney has released tax returns and prepared them knowing he'd have to do this, he had to massage the numbers to get it to a rate anyone finds acceptable. He's also on record saying he didn't think anyone whould pay more than they owed. (Actually, he said that if he did that - which he apparently now has! - it would make him unfit for the presidency.) It makes it harder to swallow than ever that he was paying this level regularly. To be fair, the Bloomberg video claims he had an average effective rate of 20.2% since 1990, and never paid lower than 13.7%. But they don't explain what data those calculations are based on, or why his tax rate has been consistently near the bottom of that range while the public is looking on.

There are ways to tell this story to Romney's advantage. He could admit that he paid less in taxes than most Americans, but his charity rate of giving nearly 30% of his income to charity shows a commitment to the common good. This would require details on what charities he supported, of course, but that's a real opportunity to humanize him. I honestly don't know why he hasn't done more of that; if it's the concern over the LDS connection, he's still given 21.2% of his income to charity even above that tithing. If this is legitimate, it's worth shouting to the mountaintops. And there's a real story to be told here: that Romney walks the walk, he's recognizing government is not the best provider of help to the poor and he's doing his best to help the charities he believes in do their work. He might even admit that his tax rate is unfair, but being a realist, he wanted to put his money where it would do the best good.

That's a story a fair number of independents can get behind. Heck, I'm pretty liberal and if I vote for any candidate it will be Obama - but that's a position even I would be sympathetic to. It wouldn't change my aversion to other parts of his policies, but even I'd have a certain grudging respect.

But in the absence of more info, both on the kind of charitable donations and on those other years, I can't make that jump. The fact that he and Ann have said they'd given "you people" all the information we deserved, the way he's fought us tooth and nail over getting even this much information, the way he claims those unreleased years look so much better than what we've actually seen - that's a little much to take on faith.  
Tags: politics
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