I spent some time yesterday going through Willard's 2010 return and 2011 estimates of his taxes, and I agree with David Shuster in this segment. There's every possibility that the Romneys paid no income taxes at all in 2009 and possibly also in 2008. Here's why, starting at about 1:08 in the video above:
SHUSTER: Actually, Governor, if you think a limited release is going to put this issue behind you, you're politically tone-deaf. First, your 2010 return indicates you paid a rate of 13.9 percent. Furthermore, it suggests you paid far lower than that in 2009. You see, the 2010 return reveals you carried over $4.9 million dollars in losses from the previous year. That means you paid no taxes on capital gains in 2009, including no taxes on your carried interest.
So how much did you pay in 2009? Zero? How close to zero was it, Governor? Or how about the 2008 year, where the investment market first crashed?
Taxpayers are limited on the amount of capital losses they can use to offset income. In a year with low capital gains, high capital losses can offset the amount of those gains for a net-zero result. Any losses not used are carried forward to the following year, where they can be used there. The bottom line on Romney's tax return is that he likely paid minimal taxes in 2009, since his charitable deductions probably offset any speaker's fees, dividends and interest he was paid. I'm guessing he paid payroll tax on the speaker's fees up to the cap, and that is about it. Must be pretty nice, eh? Perhaps that's why Ann Romney thinks it's unfortunate that he had to release even 2010, since she's concerned about people knowing how successful he is.
Willard's financial disclosures also indicate he profited greatly from foreclosures in Florida, which would certainly explain his desire to let the housing market fall into the tank while he reaped the benefits, both tax-wise and personally.
There's been a lot of spin from Romney on these tax returns, and particularly on the fact that his income is comprised mostly of "carried interest". But that, too, is all smoke and mirrors. He claims that carried interest payments are already taxed at corporate rates. The problem with that, as we all know, is that very, very few corporations pay the full corporate tax rate of 35 percent. In fact, many corporations have an effective tax rate of zero or even negative rates. There is no reason to expect some specific reason for Romney's carried interest payments to be from companies that pay the full corporate rate.
All of this is legal. Even Romney's Swiss bank account is legal. But it speaks to the larger question of whether or not anyone who has never known what it's like to wonder if the kids will eat or the mortgage will be paid can possibly formulate tax policy that would make a lick of sense for anyone but the 1 percent. Since Romney has not exactly demonstrated an aptitude for empathy, I'm guessing not.
If I'm wrong about this, I'd suggest the Romney campaign release a few more years' tax returns. Let's see if he has ever worried about "putting food on his family." Odds, anyone?