Tuesday, September 25, 2012

Meaningless tax release

The Romney campaign released info on the effective tax rate he paid in each of the last 20 years.  Here's a letter written by his accountants, PricewaterhouseCoopers, which states that Romney always paid at least 13.66 percent of his Adjusted Gross Income (AGI) in personal income taxes.  They also state that he has paid an "average" effective rate of 20.2% for those years, though that average is found by just adding up the percent paid in each year and dividing by 20.  They don't, however, give any info regarding the actual AGI amounts or how much was actually paid in taxes.

We know that Romney has a huge IRA in which he's sheltered tens of millions of dollars.  IRA contributions are not included in the AGI.  So whatever games he played to hide lots/most of his money in his IRA would not show up in his AGI and hence not show up in his effective tax rate.  For example could have made $10 million in a year, hidden $9 million in his IRA, paid 20% of the remaining million in taxes, and claimed to have paid a 20% rate, even though it was actually 2%.

Without seeing the actual numbers/returns, we can't really know anything real about Romney's tax history.  His new "release" doesn't actually tell us much at all.

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