In the music world, Tuesday is always release day. The impending release of Mitt Romney’s tax returns today was, to me at least, reminiscent to the anticipation of a much-awaited record being released. Well, the return has been released now, and the pundits are picking it apart.
A lot was initially made about the effective tax rate. There’s no need to go into a dissertation about why the capital gains rate and the dividends rate are where they are, but suffice it to say that the Romneys are paying the tax that they owe. Later reports are focusing on the nature of some of the investments and whether or not the Romneys are hiding income overseas.
The first impression I get is just the sheer size of the numbers. It’s hard to fathom just how much wealth accumulation is generating these amounts of investment income.
As with the Gingrich return, where you don’t get the whole picture because you don’t get to see what’s in the Gingrich Holdings return, you don’t get the full picture with the Romney return because a lot of investments are held in trusts and partnerships. The Romneys have clearly engaged in a high level of generational transfer planning (good for them). As for some of the partnership interests, yes, it does appear that some of those are foreign investments, which will raise red flags for some people. Ownership in a foreign entity is not always in and of itself a tax avoidance vehicle (I have a number of clients with investments in foreign LPs). Again, without seeing the return of the foreign partnership, it’s hard to gauge exactly what is and isn’t flowing through to the individual return.
Santorum, your turn!