Mitt’s Remaining Taxing Questions

Mitt Romney finally filed his taxes for 2011 and on Friday, Romney and his running mate Paul Ryan made their 2011 returns public along a letter from Romney’s accounting firm PricewaterhouseCoopers attesting to Romney’s tax rate over the last 20 years.

Romney is hoping these disclosures will end discussion of his personal finances and allow him to turn his campaign in advance of the October 3 debate. However, these disclosures raise perhaps as many questions as they answer.

  • Mitt’s enormous IRA: Romney’s IRA is valued at over $100,000,000. How did he build up such a big retirement fund given the $6,000 legal annual contribution limit. Even assuming a healthy 10% rate of return it would take 78 year for an IRA to grow that much. Did Bain undervalue the assets it contributed in Mitt’s IRA?
  • Cayman Islands: In this 2010 video courtesy of BuzzFeed, Paul Ryan calls the Cayman Islands “the place you hide your money”. We know his running mate Mitt Romney had an offshore bank account there? How long has he had the account? How much money was in it? And how much tax was he able to avoid thereby?
  • Residency: M. S. Bellows of the Guardian has an interesting theory about why Romney refuses to follow the tradition of disclosing his tax returns. Perhaps he is not so worried about the bottom line (how much taxes he paid) but the top lines (his mailing address)!

    Tax returns require taxpayers to state their residence address, and the Romney returns already produced, although partially redacted, state clearly that they lived in ‘Belmont, MA 02478’ in 2012 (tax year 2011) and 2011 (tax year 2010)… But the Romneys, arbitrarily, refuse to disclose a copy of the returns they filed in 2010 or 2009 (for tax years 2009 and 2008) – which, perhaps not coincidentally, bracket the time period when Romney allegedly committed fraud by voting in Massachusetts when he actually resided in California. So here’s the question: did Romney put his son’s basement’s address on the returns he filed in 2009 and 2010? Or did he truthfully use his real (non-Massachusetts) address, thus implicating himself in voter fraud?

  • Missing Millions: According to Rick Newman at US News & World Report, Mitt’s preliminary 2011 tax return showed $20,901,075 in adjusted gross income. His final return shows $13,696,961 in AGI. A $7,204,114 error is not small change! Where does the discrepancy arise?
  • Missing Thousands: Similarly, Paul Ryan’s final return show $64,122 in income that he “forgot” to list in his original return. To Romney that might not be much, but it still represents 20% of Ryan’s income. How could Ryan who chairs the House Budget Committee lose track of 20% of his family income?
  • Donations: Romney had a political problem with his 2011 return. Earlier this year, he said he never paid less that a 13% tax rate, but this year’s taxes were going to work out to a 12.2% rate. In order to avoid this embarrassment, he voluntarily chose to claim only $2.25M out of the $4.02M in donations they listed. This increased their tax rate to 14.1%. According to William Douglas and David Lightman:

    In 2011, the Romney’s charitable cash contributions included $1.115 million to the Mormon church and $214,516 to Tyler Charitable Foundation, a Romney family foundation. The Romneys also claimed a deduction of $920,573 for noncash contributions that were not spelled out in a statement accompanying the return.

    Romney could file an amended return at any time during the next three years and receive a refund of this excess tax. Does he plan to do this? And if not, how does that square with his statement in July

    “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.”

At least there is one question that is off the table for now:

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