A Shocking Possibility
Our tax code is broken — really broken. It’s rigged for the rich and against the middle class.
How rigged? It’s possible that Mitt Romney paid no federal taxes at all in 2009, which would explain why once again today he said he wouldn’t release any tax returns from before 2010.
Let’s take a closer look at how this shocking possibility could’ve happened.
Joshua Green from Bloomberg Businessweek recently talked to some private equity executives about what Romney could be hiding. He explains how Romney could’ve gotten away with paying nothing in 2009:
When the stock market collapsed in 2008, the wealthiest investors fared worse than everyone else. (See, for instance, this Merrill Lynch study.) The “ultra-rich” — those with fortunes over $30 million — fared worst of all, losing on average about 25 percent of their net worth. “There was really nowhere to hide as an investor in 2008,” Merrill Lynch’s president of global wealth management pointed out in 2009. “No region ended the year unscathed.”
As a member of the ultra-rich, Romney probably wasn’t spared major losses. And it’s possible that he suffered a large enough capital loss that, carried forward and coupled with his various offshore tax havens, he wound up paying no U.S. federal taxes at all in 2009.
There’s additional evidence for this theory in the one tax return we have seen — the one from 2010 — because it includes capital gains losses carried forward from the previous year. In other words, Romney lost enough (on paper at least) in 2009 to help lower his taxes in both 2009 and 2010.
Greg Sargent from the Washington Post talked to some tax experts who said it was a possibility that Romney paid nothing or next to nothing in 2009. One expert suggested that this is the “natural explanation” for Romney’s refusal to come clean and release more tax returns:
Asked what the likelihood was that Romney paid substantially lower tax rates than that in previous years, Daniel Shaviro, a professor of taxation at New York University, said: “His extreme reluctance to release the returns makes you wonder — it becomes the natural expanation.”
Shaviro, who supports Obama but is a nonpartisan tax analyst, said the question would then be this: “Did he get there just by selling losing stocks, or did he get there with aggressive tax shelters?”
It is literally impossible to resolve these questions unless Mitt Romney releases more tax returns, which is exactly what Americans want him to do. A poll out today shows that 56 percent of voters — including 61 percent of independents — believe Romney should release a full 12 years of tax returns. Separately, 56 percent of voters also agree that Romney should release more information about his shady foreign finances in tax havens like Switzerland and Bermuda.
And it’s not just people on the left and in the middle that want to see more tax returns. At least 15 prominent Republicans have called on Romney to release more returns — pronto.
IN ONE SENTENCE: We already know that the tax code is rigged for people like Mitt Romney – he paid a lower tax rate than millions of middle class workers in 2010 and now he needs to come clean with his tax returns so we can find out whether he got away with paying less or even nothing at all in 2009.
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