Thursday, April 05, 2012

Did Romney pay zero taxes in 2009? And 2008?

Romney's caught heat for a lack of transparency in his finances, especially compared to his father's presidential run.  He's now announced a delay in filing his final 2011 taxes, presumably looking for a time when people will be less resentful of a multi-millionaire paying lower tax rates than they do.

Back in the heat of the primary, though, Romney was forced to release his 2010 taxes and estimate 2011, but failed to do any more as the Democrats have demanded.  The Washington Post blogger guessed it was the exotic nature of his finances that made him hesitant to release them.  Let me try another guess.

Among the details that may spur fresh debate: The returns show that Romney was able to cut his taxable income by $4.8 million because of losses carried over from previous years. Under the tax code, taxpayers who lose money from their investments can deduct those losses against their capital gains. If a taxpayer ends up losing so much that the losses outweigh the gains in a given year, the rest of those losses can be carried to the next year and subtracted from income.
Capital losses are carried over from previous years - the years that Romney still refuses to release.  The carryover means he had no net capital gains in 2009, possibly in previous years as well.  The only taxes he paid in 2010 were capital gains - he had no earned income.

Unless he had earned income in 2009 that he didn't in 2010, which seems unlikely because he's been running for president since 2006, then the information he has given suggests he paid no taxes in 2009, or even earlier if he took large capital losses in 2007 or 2008 that carried over for subsequent years.

I'm no tax expert so maybe I'm missing something, but this looks like dynamite to me.

UPDATE:  looks like others have had the same thought.  More links here.