So, Mitt Romney released his 2011 tax return. The newspapers report that Mitt and Ann Romney engineered their tax return to show that he paid 14.1% of his income in taxes. The primary mechanism employed to engineer their tax return, according to the press reports, was to not claim all the charitable deductions Mitt and Ann could have claimed. Reportedly, the Romneys donated $4 million to various charities (I wonder which charities?) in 2011. Although they could have claimed a $4 million charitable contribution, the Romneys only claimed $2.5 million in charitable deductions on their return. By doing so, they increased their tax rate to 14.1%. A press release was then issued reporting their effective tax rate.
My prediction: the first item on Romneys to-do list, whether he wins the election or not, is to file an amended tax return the day after the election, claiming the entire $4 million of charitable contributions, and getting a big fat refund from the IRS that will reduce his effective tax rate to about 10.5%.
But thats not all . . . the Romneys released a summary of their taxes for the past 20 years, showing that their average tax rate over that time period had never fallen below 13.66%. I love math problems involving average rates. Average rates can mean anything.
For example, Billy the Hillbilly wants to go to school. The school is 3 miles away. The first mile involves climbing over a mountain with lots of boulders, etc. Over this mile, Billy can only walk 2 miles per hour. After the first mile, Billy comes to a river. There is a path along the river for another mile. While walking along the river, Billy can walk 3 miles per hour. Finally, Billy comes to a road. Billy walks the final mile to school over the road, and can walk 4 miles per hour. What is Billys average speed while walking to school? If you answer 3 miles per hour, Mitt Romney may have tricked you into voting for him (the correct answer is approximately 2.769 miles per hour).
Heres the thing: Romneys summary doesnt tell us much at all. For the first several years of that average rate, Mitt Romney may have been climbing over a number of tax boulders. Paying 18% on $10,000 of income one year, and 10% on $1 million of income the next year, does not mean Romney paid an average tax rate of around 14%. The truth can only be ascertained by examining the details of every tax return for all 20 years. My guess is hell never let us do that.
Any more than hell let us see his underwear.