Mitt Romney to release his taxes: beyond the obvious ($$), six things we can learn
Mitt Romney is releasing his 2010 tax returns and estimated 2011 taxes on Tuesday, providing information on his income, deductions, and how the wealthiest Americans navigate the system.
When Mitt Romney releases his tax returns for 2010 and his estimated taxes for 2011 Tuesday, tax experts expect it will be a relatively complicated return with schedules and forms that most Americans will never have to fill-out.Skip to next paragraph
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As William Gale, a fellow at the Brookings Institution, sees it, Romney’s tax return will provide an “opportunity to understand how high-income people navigate the tax system.”
In a statement, Romney spokeswoman Andrea Saul says the release, which is expected in the morning, will show that “Governor Romney pays millions in taxes each year, that he gives millions in charitable contributions, and that his investments are reported and taxed in full compliance with US tax law. Governor Romney has paid 100 percent of what he has owed.”
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Here are six key things to watch for:
How much tax did he pay relative to his income?
One simple way to measure this would be to look at Mr. Romney’s tax liability divided by his adjusted gross income. At a recent press conference, Romney said he thought his tax rate would be about 15 percent.
However, some tax experts think it might be even lower. “His tax rate is likely to be substantially below 15 percent,” says Roberton Williams of the Tax Policy Center, a non-partisan group that looks at tax policy, in Washington. “It could be as low as 13 percent,” he says.
On Monday, Warren Buffet, speaking to Bloomberg Television, said he did not fault the Republican presidential candidate. “He will not pay more than the law requires,” said Mr. Buffet.
According to Romney’s comments in the recent past, his cash income would come from his speaking fees which he estimated at $370,000, plus some royalties on books.
But, the largest amount will come from long-term capital gains and dividends, taxed at 15 percent, from his time at Bain Capital, which he headed up from 1984 to 1999. On Tuesday, Romney will reveal how much that amounted to in the past two tax years.