MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT
Last week, we posted a widely read commentary, "Did Romney Possibly Commit Fraud on His Income Taxes, But Received Amnesty?"
But there was another significant flare up about Romney's undisclosed income taxes last week, yet again. The New York Times headlined it this way: "Romney Says He Paid at Least 13% in Income Taxes." The New York Times article of August 17 also this quotation and reporter interpretation, "'Every year, I’ve paid at least 13 percent,' he [Romney] said, referring to his effective federal income tax rate, which is a higher effective rate than most people pay."
There is a problem with the New York Times article and it is a big one. Mitt Romney never referred directly to what he has or has not paid in income tax; he only referred to what he and his wife have paid in taxes in general over the last several years. (There is a second problem: The New York Times reporter implies that 13% is a high income tax rate.)
The Boston Globe also made the same mistake as the New York Times, inferring what Romney wanted them to think, rather than what he actually said. However, the Boston Globe posted Romney's statement, which doesn't mention income taxes:“I did go back and look at my taxes and over the past 10 years,” Romney said on a tarmac after landing for a fundraiser. “I never paid less than 13 percent. I think the most recent year is 13.6 or something like that. So I paid taxes every single year.”
In a Los Angeles Times article, there is reference to a campaign aide saying Romney was referring to federal taxes, but Romney never said that. Ann Romney has always said that "we" pay "our fair share" in taxes without referring to income taxes, except to say that she and Mitt will not release any income tax returns beyond a partial 2010 statement and as yet to be released 2011 returns. This is called plausible deniability. Romney can, if found out not to have paid 13% on his income taxes, deny ever saying he paid 13% on his income taxes over the years, when he was referring to taxes in general.
The Atlantic has a tape of the remarks with a fuller answer by Romney:
I just have to say, given the challenges that America faces -- 23 million people out of work, Iran about to become nuclear, one out of six Americans in poverty -- the fascination with my taxes I find to be very small-minded. I did go back and look at my taxes and over the last 10 year I never paid less than 13 percent. I think the most recent year is 13.6 percent or something like that. I paid taxes every single year. Harry Reid's charge is totally false. I'm sure waiting for Harry to put up who it was that told him what he says they told him. I don't believe it for a minute by the way. Every year I've paid at least 13 percent, and if you add in addition the amount that goes to charity, why, the number gets well above 20 percent.
How then, if the BuzzFlash at Truthout possible scenario proves to be true that the Romneys are referring to all their taxes not just federal income taxes, could they arrive at 13% in taxes. There are several ways.
If Romney received income as a sole propietor, he had to pay 7.65 percent in Medicare and Social Security taxes (more than half his proclaimed tax payments). Then you have retail tax, property tax (and they have plenty of property), you have state income taxes, etc. There's more than enough taxes going round for the Romney's to pay 13 percent of whatever there net income was over the years in taxes overall, not necessarily though in federal incomes taxes.
But supposing they paid some minor federal income tax – let's toss out 2%. How could that happen? For one thing, he has an IRA that has been estimated by some at $100 million dollars, which is nearly 2/5's of his estimated net worth. Much of his current wealth, while he still is profiting from Bain Capital investments, was earned earlier -- and is in assets and offshore accounts.
Gary Berg, a BuzzFlash at Truthout reader, also points out another possibility:
I find it interesting that Romney pointed out his percent of tax paid. If he can remember his tax rate (which actually doesn't appear on the tax form itself), he should have a decent idea of how much he paid in absolute terms (which is, of course, prominent on the tax form); i.e., saying that you paid 13% in taxes represents clear avoidance of the tax question; e.g. he couid have paid 13% of $100 ($13) and have sheltered $100,000,000 through off shore tax vehicles.
Romney has so many tax diversion tactics that any of the above hypothetical situations are possible.
But what is clear, contrary to the mass corporate media putting words into the mouths of the Romneys, is that neither Mitt nor Ann claimed to pay about 13% (extraordinarily low for a couple of their wealth) in income taxes. They never used that phrase. Mitt only claimed to pay 13% in unspecified taxes.
It is so easy to snooker the national press. Not a major article in any paper questioned Romney's avoidance of using the term income taxes; instead, they wrote that he, in effect did say it, when any journalist worth his or her salt should be be questioning why he and Ann Romney haven't used the specific term income taxes to discuss how much they have paid in taxes in general over the years.