The Romney Returns: Taxing Conversations

Mitt Romney’s taxes are dominating the political conversation this week. To cut through the noise, here are some of the highlights.

Romney is yet to release even a single complete tax return

John Marshall wrote a piece entitled Is the FBAR FUBAR?:

Through the last week of tax return follies, Mitt Romney has repeatedly stated that he’s released two years of tax returns and he’ll release no more. In fact, he’s yet to release even a single complete tax return. He filed for an extension for his 2011 returns and says he’ll release the final returns later this year when he files them. The 2010 return was actually incomplete. And what was left out points toward a question that a lot of reporters and tax experts have been wondering about but have been surprisingly reticent to discuss publicly.

Huffington Post noted yesterday that Romney never released his so-called FBAR documents [Report of Foreign Bank and Financial Accounts], special forms required [by the United States Treasury Department] from filers who have bank accounts in other countries. But the issue actually came up in a conference call back in January. Particularly about a Swiss bank account with UBS.

In that call, Romney blind trust advisor Brad Malt was asked whether Romney had “filed any and all required FBARs in a timely fashion.” To which he responded: “The people required to file FBARs are Mrs. Romney and myself, and we have filed all FBARs.”

The campaign has yet to release those FBARs. Why they’ve gotten pressed so little on it is a bit of a mystery to me.

But here’s where it gets interesting. Back in 2009, the IRS instituted a major tax amnesty program for folks who had previously secreted money in Swiss and other offshore banks. The amnesty stemmed from a settlement the US government had reached with UBS that year. Those who came forward voluntarily in the prescribed period of time could pay their back taxes, pay their fines but avoid any criminal penalties.

In 1994, Romney criticized Kennedy for not disclosing his taxes

It’s time the biggest-taxing senator in Washington shows the people of Massachusetts how much he pays in taxes. (Boston Globe, 4/19/1995)

*In 1968, Mitt’s father Gov. George W. Romney (R-MI) released twelve years of tax returns saying:

One year could be a fluke, perhaps done for show.

In 2008, Romney was being vetted as a possible running mate by Republican Presidential nominee John McCain, and Romney provides tax records going back to 1984 when he founded Bain Capital. After deliberation, McCain chose Gov. Sarah Palin as his running mate. McCain denies that the tax returns had anything to do with rejecting Romney saying simply: “Sarah Palin was the better candidate.”

In the end, we don’t know what is hidden in these tax returns, but we know that Romney is taking a lot of political heat for defying the tradition his father began whereby Presidential candidates make a full and detailed disclosure of their tax returns.

Romney is politically astute. He knows the cost of not providing this information. As CEO of Bain Capital, he has experience avoiding risk, so I would assume that there must be something in those returns which he thinks would be more objectionable to the American people than simply refusing to disclose his returns.

What could that be….? Many voices around the internet have proposed various alternatives.

Perhaps:

  • No taxes at all: We already know that Romney paid a 14% tax rate in 2010. Most Americans pay far more than that even though they earn far less than Romney. Perhaps Romney was able to use capital losses and various deductions and loopholes to completely eliminate his tax obligation in 2009.
  • His magical IRA: Perhaps Bain Capital undervalued assets being deposited in Romney’s IRA account in order to avoid the $30,000 annual cap. His IRA is now worth $21 million to $102 million, so something seems amiss.
  • Bain Capital: Maybe he does want people to see how much he was paid by Bain during the period he “retroactively resigned”? The SEC Filing on the right is from Bain’s February 2001 SEC filing although Romney attempts to avoid blame for some of Bain’s outsourcing activity by claiming that he left Bain in February 1999.
  • His Address: Doc Jess notes the Romney “was able to get on the Massachusetts ballot by saying he worked for Bain, and therefore had Mass residency in 2000, 2001 and 2002. But that may not be true”.
  • Off-Shore Tax Shelters: As mentioned above, any American with over $10,000 in accounts overseas must file a Report of Foreign Bank and Financial Accounts. Romney has yet to release a single FBAR. Perhaps he is worried that that Americans would be appaled to learn how much money he has tucked away in Bermuda, Switzerland and the Cayman Islands? Or perhaps his take returns will reveal that he taking his money off-shore in order to evade American taxes? Did he perhaps participate in the IRS’s 2009 tax amnesty program?
  • Something else: The bottom line is that only Romney (and McCain) knows what is keeping Romney from releasing his tax returns.

Video of Ann Romney and DNC ad follows the jump.
Ann Romney: We’ve give all you people need to know

DNC Advertisement: “Mitt Dancing Around The Issues.” (Note: This ad was retracted after the DNC decided not to no longer refer to Ann Romney’s horse in their advertisements.