Is It Possible Mitt Romney Paid No U.S. Income Tax?
Tax law, tax code. Credits, debits, liabilities, assets. Complicated enough when you have all the numbers, inexplicably more complicated when you don’t. The GOP’s presumptive nominee for president, Mitt Romney, has disclosed one complete tax return and will be disclosing more information on or about October 15, 2012. Meanwhile, perusal of the meager known information continues.
Mark Karlin extrapolates that Romney may have indeed paid nothing in federal income tax. Admittedly, I’m no tax expert, so bear with me as I try to parse his conclusions.
Romney has money – significant amounts – invested in foreign accounts. Theoretically, those accounts earn money. That money is income. That income is declared on tax forms filed in the countries where those accounts exist. Taxes are paid on that income to the governments of the countries where those accounts exist.
Those foreign tax payments qualify as U.S. tax credits – the amount paid as foreign income tax can be used to offset U.S. tax liability. In shorter form, say Romney paid $1,500 in tax rightfully due to another country, and his total tax bill to Uncle Sam was calculated to be $2,000. He’d pay $500 in U.S. income tax: $2,000 – 1,500 = $500. He’d get credit for the taxes paid anywhere around the globe. In another scenario (since most of Romney’s income is derived from foreign investment, with taxes paid to those countries) his tax bill here might indeed be quite low. If he paid substantial taxes to other governments, his total foreign tax credit amount might be so large as to wipe out any tax bill he would owe here. Here. In America. The country he’s running to govern.
Romney isn’t reluctant to relocate American jobs to other countries, nor is he reluctant to relocate his assets, income, or tax support to other countries. It seems that Romney is willing to develop every country BUT America; his only reluctance is to show his financial data, and it’s extreme. Mark Karlin sums it up more eloquently that I can:
“When a person runs for President and declares that he or she won’t let being president interfere with their private financial gain, it’s basically poking a stick in the eye of the American voter.”