Mitt Romney said on Thursday on the campaign trail that he never paid less than a 13 percent tax rate, adding that continued calls for him to release his tax returns are “small-minded.” “I did go back and look at my taxes, and over the past 10 years I never paid less than 13 percent,” he said. “And if you add in addition the amount that goes to charity, why the number gets well above 20 percent.”
Leaving aside that Romney expects everyone to simply take his word for it that this is true, there are still many questions that can’t be answered without seeing Romney’s tax returns. Here are seven:
1) What kind of taxes? Does that 13 percent cover income taxes, capital gains taxes, or some combination? By Romney’s own admission, nearly all of his income comes from investments (so the low capital gains tax rate helps him drive his overall rate far below that of many middle-class families).
2) What sort of deductions did Romney employ? In addition to the deduction they receive for classifying Ann Romney’s horse as a business, what other deductions are the Romneys using to lower their tax rate?
3) How did Romney’s IRA grow so large? Romney’s retirement account contains more than $100 million, despite annual limits on contributions. How did that happen?
4) What sort of offshore tax strategies does Romney use? While Romney was on the executive committee of Marriott, the company employed complex strategies known as “Son of Boss” to dodge taxes, prompting consequences with the IRS. Did Romney use a similar strategy for his own taxes?
5) Was Romney’s Swiss bank account disclosed on all tax returns for all years? Did he file a Report of Foreign Bank and Financial Accounts (FBAR) as required by the deadline for each year he had the account?
6) Did Romney participate in the IRS’s settlement initiative for undeclared offshore financial accounts (the amnesty)? In 2009, the IRS gave American citizens a window to declare their Swiss bank accounts and avoid prosecution for tax dodging, before it launched a crackdown on foreign accounts. As Slate’s Matt Yglesias wrote, “Romney might well have thought in 2007 and 2008 that there was nothing to fear about a non-disclosed offshore account he’d set up years earlier precisely because it wasn’t disclosed. But then came the settlement and the rush of non-disclosers to apply for the amnesty.”
7) Why did Romney invest in Houston rental real estate that was explicitly marketed as a tax shelter? As The New York Times reported, Romney was an investor in a real estate scheme in which the organizers “played up the tax shelter benefits.” The deal turned out to be a lousy investment.
On a final note, does Romney think that the 20 prominent conservatives calling for more tax returns are “small minded”?