The Romney campaign is disclosing the percentage of tax he paid “on the amount he got after he subtracted out all those losses,” which could have been very substantial, Galle says—perhaps even enough to almost eliminate Romney’s tax liability. That means that although Romney paid at least something in previous years, it could have been a very small amount. “He could have been paying 13.66 percent of $100 in 2009. He might have paid $13.66,” Galle continues. We won’t know unless the Romney campaign releases more information.
Romney still pays taxes on his sons’ enormous trust funds. David Cay Johnston, a Reuters columnist, tax expert, and Pulitzer Prize winner, tells Mother Jones that without the taxes Romney paid on his sons’ trust funds, which are worth around $100 million combined, “his rate would be much lower.”
Romney’s advisers used an odd method to calculate how much he paid over the past two decades. As the Washington Post‘s Greg Sargent reported, Romney’s advisers averaged his tax rates over 20 years to get a number for his tax burden over that period. But it would have been more accurate to take Romney’s total tax paid over that period and divide it by his total earnings to get a new percentage. Sargent spoke to Roberton Williams, a senior fellow at the Tax Policy Center, about this problem:
“Let’s say you have 10 years in which you paid 13 percent in taxes, and 10 years in which you paid 27 percent,” Williams told me. “If you average those rates, you’ll get an overall rate of 20 percent. But if the 13 percent years were high income years, and the 27 percent years were low income years, then his total taxes paid as a share of total income over the 20 years would be less, perhaps significantly less, than 20 percent.”
MORE: 9 Things to Know About Mitt Romney’s Tax Returns | Mother Jones.