
Charles Dharapak/AP Photo
Mitt Romney speaking at a campaign fundraising event at the Red Rock Hotel and Casino Friday in Las Vegas.
There you have it…Mitt Romney released his tax returns. Well, at least the ones for 2011, as he previously vowed to do. Mitt Romney’s trustee released this statement. One paragraph in particular has caught the eye of many Romney tax return junkies:
The Romneys donated $4,020,772 to charity in 2011, amounting to nearly 30% of their income.
The Romneys claimed a deduction for $2.25 million of those charitable contributions.
The Romneys’ generous charitable donations in 2011 would have significantly reduced their tax obligation for the year. The Romneys thus 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.
Well that seems nice that they paid more taxes than they owed, right? Well there is one slight problem. In July, Romney told ABC News, "I don't pay more than are legally due and frankly if I had paid more than are legally due I don't think I'd be qualified to become president. I'd think people would want me to follow the law and pay only what the tax code requires."
Once again, look at this quote in today's statement by Romney's trustee, "The Romneys' generous charitable donations in 2011 would have significantly reduced their tax obligation for the year. The Romneys thus 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."
The video editing machines in Chicago must be on fire right about now.
Talking Points Memo Brian Beutler has even gone further by actually calculating what Mitt Romney’s effective tax rate would be if he did deduct all of his charitable contributions:
Romney’s 14.1 percent effective federal tax rate in 2011 would’ve been lower if he’d deducted all of his charitable contributions from his nearly $13.7 million in income. But after estimating that he paid at least 13 percent of his income in taxes in each of the last 10 years, Romney opted not to deduct nearly $1.8 million worth of charitable contributions last year to artificially lift his tax liability.
So what would Romney’s effective tax rate have been if he’d deducted all of his charitable donations? About 12.2 percent.
Here’s the math we used, validated by tax experts at the liberal Center for American Progress.
According to the campaign, Romney earned $13,696,951 in 2011, of which he paid $1,935,708 in taxes.
But those figures include $1,770,772 in charitable contributions that he could have deducted, but chose not to. Since the campaign acknowledges that nearly all of Romney’s income came from investments, we assume he paid a 15 percent rate on that $1,770,772 — or $265,615.80 in taxes that he didn’t have to pay.
If you subtract that figure from his total taxes, you’re left with $1,670,092.20 — the amount of tax he would have paid if he’d deducted all of his charitable contributions.
And that’s 12.2 percent of his overall income.