Mitt Romney's Accountants Are Just As Good As You've Always Expected
The calls on Mitt Romney to release his tax returns at first seemed to be just another desperate last-ditch move from all of the candidates who were trailing him by 50 percentage points in every poll. But, thanks to his unusually ill-prepared responses, the story isn't going away. Are we learning anything about his rich-person accounting tricks, though, that couldn't be predicted by simply looking at a picture of him for half a second?
Yesterday he acknowledged that he's paid an effective tax rate of about 15% for the last decade. Did we need him to tell us that? Mitt Romney hasn't been a common wage worker for many, many years, so his tax rate would be around 15% since that's what you pay on income derived from investments.
Others are reporting that he's been taking advantage of offshore tax havens on beautiful tropical islands that, as a tax lawyer tells ABC News, "avoid a whole series of small traps in the tax code that ordinary people would face if they paid tax on an onshore basis." Again: Look at a picture of Mitt Romney, founder of Bain Capital, for half a second. You've always known that he does this.
We are learning things about Mitt Romney's wealth that bring up well-reported problems with the tax code. Let's hope, as the details come out this time, that we can channel all the attention into pressuring Congress to close all of these loopholes that they never close, instead of briefly feigning outrage at the fact that someone would dare use them and leaving it at that, as usually happens.
Update: I should have emphasized that the aforelinked ABC News story was the work of Brian Ross, meaning at least half of the details would be wrong. A friendly neighborhood tax lawyer writes in to clear things up:
As an avid Gawker reader (and a tax lawyer) just wanted to point out that ABC News article is at best misleading (and in places, just wrong). On a basic level, the U.S. tax system is set up so the jurisdiction of formation of the investment entity doesn't affect tax rates. So for example, if you set up a Delaware limited partnership to make investments it would not result in a higher or lower tax rate than if you set up a partnership domiciled in the Cayman Islands. The only thing affecting the tax rates is the nature of the investments and the jurisdiction of the investors. A private equity fund like Bain sets up investment vehicles in the Cayman Islands for a variety of reasons but none relate to any meaningful reduction in taxes paid in the U.S.
This 2007 Los Angeles Times version is much better.
[Image via AP]