Romney Prepares to Release 2011 Tax Return, Letter About Previous 20 Years
Mitt Romney plans a Friday afternoon news dump for releasing his 2011 tax returns, which so far he has only released in a partial fashion. The early report from the manager of Romney’s blind trust is that he paid an effective 14.1% tax rate in 2011, not much better than the 13.9% rate for 2010, but more than the “no taxes” which Harry Reid famously accused him of paying over a ten-year spread.
Romney and his wife, Ann, paid more than $1.9 million in taxes on about $13.7 million in income, most of which come from investments. The Romneys donated slightly more than $4 million to charity last year, amounting to nearly 30% of their income.
The information comes from Brad Malt, who manages the Romneys’ blind trust. He made the disclosure on a blog post on the Romney campaign website. The documents will be released at 3 p.m. ET.
Here’s the blog post from Brad Malt. Romney did a kind of millionaire’s minimum tax, by capping the charitable deductions it took in 2011. The Romneys donated $4.02 million to charity but only claimed a deduction for $2.25 million of it. Claiming a deduction on all $4 million would have lowered the effective tax rate even further. So the estate planning here was to keep the tax rate in the 14% region and in particular above 13%, which he claimed he has never paid lower than for the last 10 years, again in reaction to Harry Reid’s charges.
Still, that’s an exceedingly low tax rate of its own right. It seems that the only adjustment Romney made to ensure paying a higher percentage of his income in taxes comes from the limiting of the charitable deductions. Otherwise he pursued the exact same strategies, at least based on the limited knowledge we have no before the release. He may not have had much of a choice – most of his income came from investments, and they are currently taxed at just 15%.
In addition to the 2011 return, the Romney campaign will release a letter from PricewaterhouseCoopers, the Romneys’ tax preparer, summarizing the family’s tax returns over a 20-year period from 1990-2009. So in lieu of full disclosure, we’ll get this summary. Here’s what it will include:
In each year during the entire 20-year period, the Romneys owed both state and federal income taxes.
Over the entire 20-year period, the average annual effective federal tax rate was 20.20%.
Over the entire 20-year period, the lowest annual effective federal personal tax rate was 13.66%.
Over the entire 20-year period, the Romneys gave to charity an average of 13.45% of their adjusted gross income.
Over the entire 20-year period, the total federal and state taxes owed plus the total charitable donations deducted represented 38.49% of total AGI.
If the taxes are this benign, relatively speaking (13% is really pretty low for an effective tax rate), it doesn’t seem like such a stretch to release them. I completely object to “counting” charitable donations as taxes, as the campaign does in that last line. That’s ridiculous, especially because charitable donations reduce your tax rate. But if Romney never paid no taxes, and if he averaged out to a 20% rate over the 20-year period, it seems harmless to show them to the world. Yet he won’t.
The documents will be available here at 3:00pm ET. I’ll have more after that.