Friday, September 21, 2012

Mitt’s Taxes and Rashid Khalidi

For UUs who wanted to know.  Now, I’d like to see hear that recording of Obama speaking at that dinner for Rashid Khalidi. The LA Times won’t release it because it was secretly recorded…..

Note the contributions to his Church.

Good afternoon,

Gov. and Mrs. Romney’s 2011 tax return is now available athttp://www.mittromney.com/disclosure.

Also posted is a notarized letter from the Romneys’ tax preparer, PricewaterhouseCoopers, LLP (PWC), giving a summary of tax rates from the Romneys’ tax returns for the 20-year period of 1990-2009 along with a statement from former IRS Commissioner Fred Goldberg.

Furthermore, physician letters for both Gov. Romney and Rep. Ryan, making public their physical condition and medical history, are also available at that link

Please see below for a question and answer document regarding the return and, again, for reference you can view the blog post from Brad Malt, the trustee of the Romney’s blind trust, detailing the information online here: http://www.mittromney.com/blogs/mitts-view/2012/09/note-trustee-brad-malt.

In addition to the complete 2010 and 2011 tax returns, Gov. Romney has released nine financial disclosures since 2002, which are posted on this site as well. There are 3 federal Public Financial Disclosures (from 2007, 2011, and 2012), and 6 Massachusetts Statements of Financial Interests (from 2002, 2003, 2004, 2005, 2006, and 2007). The site also includes Congressman Paul Ryan’s financial information: tax returns from 2011 and 2010 for Paul and Janna Ryan, as well as 14 federal Public Financial Disclosures covering 1999-2012.

And, again, all questions regarding tax returns should be directed to returns @ mittromney.com.

Thanks,

Andrea

Topline Facts

2011 Filed Tax Return:

$1,935,708 in taxes on $13,696,951 in mostly investment income

14.1% effective tax rate

$4,020,772 donated to charity; $2,250,772 in charitable deductions

2010 Filed Tax Return:

$3,009,766 in taxes on $21,646,507 in mostly investment income

13.9% effective tax rate

$2,983,974 donated to charity

There are now over 1200 pages of tax returns, and several years of financial disclosures, posted on the Romney for President website.  The campaign has also released a letterfrom PricewaterhouseCoopers providing information about the Romneys’ taxes going back to 1990. 

FAQ

1.  How much did the Romneys pay in taxes in 2011?

In 2011, the Romneys paid just over $1.9 million in federal income taxes.  For the two years 2010 and 2011, they paid $4.9 million in federal income taxes. 

2.  What is the Romneys’ effective tax rate for 2011?

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Their effective federal tax rate in 2011 is 14.1% of adjusted gross income (AGI).

Governor and Mrs. Romney donated over $4 million – nearly 30% of their income – to charity in 2011.  The Romneys took a deduction for $2.25 million of those charitable contributions. 

Had the Romneys made no charitable donations, and therefore taken no charitable deduction, their effective tax rate would have been 18.8% of AGI.

Their generous giving in 2011 could have significantly reduced their tax obligation this year. The Romneys voluntarily limited their deduction of charitable contributions to conform to the Governor's statement in August, based upon the January estimate of income, that he paid at least 13% in income taxes in each of the last 10 years.

3.  Where did the Romneys’ charitable contributions go?

The Romneys’ charitable contributions went to their charitable foundation, the Tyler Charitable Foundation, and to tithing to their church, the Church of Jesus Christ of Latter-Day Saints.

In 2011, the Tyler Charitable Foundation made donations to a number of causes, including the Joey Fund (for cystic fibrosis), Cystic Fibrosis Foundation, Sabin Children’s Foundation, National Multiple Sclerosis Society, Dana-Farber Cancer Institute’s Jimmy Fund, and Homes for Our Troops.

The Church of Jesus Christ of Latter-Day Saints has a long tradition of charitable works, such as working with the Red Cross on disaster relief. In addition, the LDS Charities work around the world helping the less fortunate through humanitarian aid, clean water, food production, and medical care.

4.  Why are you releasing this today? 

Because it was filed today.

5.  When were the forms completed?      

Governor Romney signed his return yesterday.

6.  Why didn’t he file his 2011 taxes on April 15th?

As we said in April, the Romneys filed for an extension, as they did in prior years, because the investment information required to prepare complete and accurate tax returns was not available by April 15.  They cannot file tax returns until this information is provided by third parties.  This is a common practice for taxpayers with similar types of investments.  However, all taxes owed for 2011 were paid by Governor and Mrs. Romney by April 15.

7.  Why is his 2011 income one-third lower than his 2010 income? 

The Romneys’ income can vary significantly from year to year, depending primarily on what investments are sold and how much they have appreciated or depreciated.

8.  How much of his 2011 income is from capital gains?

The Romneys reported $6.8 million in income from capital gains on their 2011 return.  That compares to $12.57 million in 2010.

9.  In the PricewaterhouseCoopers letter, how were the average tax rates calculated?

PricewaterhouseCoopers calculated the average effective federal income tax rate by summing the effective rates for each of the years 1990-2009, and then dividing by 20.  The same formula is used to generate the average effective state income tax rate, and the average effective charitable contribution deduction rate. 

10.  In the PricewaterhouseCoopers letter, how was the 38.49% figure, total federal and state taxes and charitable contributions as a share of AGI, calculated?

PricewaterhouseCoopers added all the dollar amounts paid each year for federal taxes, state taxes, and charitable contributions deducted, and divided that by the total AGI for the period. 

11.  Why are there four separate documents for one tax year?

The Romneys have established three trusts under Massachusetts law, one for Mrs. Romney, one for Gov. Romney, and a family trust. Each of these three trusts has one Form 1041 tax document, and then income from these three trusts is combined and reflected on the Romney’s Form 1040.

12. There are some investments that seem to be established in offshore accounts, like the Cayman Islands and Bermuda. Are these investments evading taxes?

No, the investments by the blind trusts in funds established in the Cayman Islands or other jurisdictions are taxed in the very same way they would be if the shares were held in the US rather than through a Cayman fund.  No taxes are evaded or reduced.  These funds are all registered with the IRS and report all income to investors and the IRS, just like domestic funds.  Whether in Bermuda or Boston or elsewhere, there is no difference in how they are taxed.

In addition, it is important to note that there are no offshore accounts.  These are investments in funds that are organized outside the US.

Further, it is important to note that Governor Romney did not make these investments.  Governor and Mrs. Romney's assets are managed on a blind basis.  They do not control the investment of these assets. The assets are under the control and overall management of an independent trustee.

Finally, the trustee did not choose where the investments were located any more than a stockholder in a Fortune 500 company chooses where that company is organized.  Only the sponsor of the fund decides where it is organized. That responsibility is totally outside the control of a passive investor like Gov. Romney or the trustee of his blind trust.

13.  Why is there information that is redacted?

Any personal or sensitive information on the various tax forms has been eliminated in order to make the material public. Redacted material includes Social Security numbers, street addresses, account numbers or partial account numbers, business and partner tax ID numbers, and PricewaterhouseCoopers’ internal coding and preparer information.

14.  What about state taxes?

Governor and Mrs. Romney are residents of the Commonwealth of Massachusetts, and they pay all state taxes they are required to pay.

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