Mitt Is Overpaying His Taxes – For Now
Today, the Romney campaign released a summary of Mitt Romney’s tax returns since 1990 and his 2011 tax return. The most striking part of the announcement is that Romney chose to forego $1.75 million in charitable deductions available to him in 2011 in order to ensure that his tax rate would be at least 13 percent, the estimated level he announced in January.
Foregoing those deductions is an interesting choice for two reasons, and not simply because Mitt is leaving money on the table. The first is that, less than two months ago, Romney argued that overpaying your taxes is a sign of incompetence. He 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.
The second oddity of this announcement is that maybe Romney won’t have to pay those extra taxes after all. You have three years after filing to amend your tax returns and claim deductions that you missed the first time you filed. So, if Romney loses the election, he can amend his return to claim the deductions he skipped and get a refund check from the government.
Romney spokeswoman Michele Davis, asked if he might later amend the 2011 return to claim the deductions, responded "He will not do that." So that's a promise from Mitt Romney. But since tax returns are confidential documents, we won't know whether he keeps the promise.
Larry Campagna, a litigation partner at Chamberlain Hrdlicka specializing in tax, confirmed to me that Romney would have the option to amend his 2011 returns, and that an amendment would be a private matter. An IRS employee who disclosed the existence of the amended return would be committing a felony. If Romney is President, he will face political pressure to make continued tax disclosures. But if he's a private citizen, he won't have to heed calls for more tax transparency -- he can amend his 2011 taxes and nobody will ever know.
So in a sense, overpaying his taxes is the best kind of campaign spending: Romney coughed up an extra few hundred thousand dollars in an effort to avoid some bad press, but he has the option to get all the money back if he loses. It’s exactly the kind of smart investment you would expect from the founder of Bain Capital.