Deconstructionist interpretation of tax law explained (quiet room required)

Amy Davidson:

However straightforward tax returns and the rules they are based on may seem, they are political documents—and pliable ones. Mitt Romney proved this on Friday, both with the 2011 return he released (click on the document to expand)—showing income of $13.7 million and taxes of $1.9 million—and the years of returns he continued to withhold, even as he has offered a note from his accountant instead, as if a Presidential campaign were elementary school, with Price Waterhouse Cooper in loco parentis. He also demonstrated that when one’s statements don’t match reality, one can try to make reality match the statements—if one spends enough money and is willing to ignore other contradictions.

What do we have that is new? The tax return that was released on Friday is one that a casual listener might have assumed Romney had released long ago—he and his campaign have often talked about how he, like John McCain, is offering the public two years’ worth of returns. With that figure rattling around, the headlines about an additional year might have led one to expect a third. That is not the case: this is the slow completion of the release for 2011, for which we so far only have had an estimate. (The other year Romney has made available is 2010.) This is the first way in which Romney has now allowed reality to catch up with his rhetoric. Another has to do with his tax rate: Romney has said that he has, over the last decade, paid at least thirteen per cent of his income in taxes every year, and the 2011 return’s effective rate is 14.1 per cent. (The letter from his accountant says that “over the entire 20-year period, the lowest annual effective federal personal tax rate was 13.66%.”) But that has only been accomplished because, as the Romneys’ trustee wrote in a memo, they “limited their deduction of charitable contributions to conform to the Governor’s statement in August.” That meant leaving out more than a million dollars out of more than four million in charitable gifts—a generous amount, the deductions for which he can, incidentally, still come back and claim later. (The Wall Street Journal spoke to a tax expert who estimated that, with the full deduction, the Romneys would have paid 10.5 per cent.) 

As was widely noted, Romney has also said that he considers claiming every possible legal deduction an ethical test, with rather distinctive terms: if you pay any more than you really, really must, you have failed. Tax returns are about decisions, and Romney, in this case, had to decide which of those claims to make true...

We do, at any rate, now also have a summary: twenty years, with twenty federal income-tax rates that average out to twenty per cent. (The Journal pointed out that this is different from saying that the Romneys paid twenty per cent of the total.) Before the conventions, Romney said that we didn’t need to worry about what was in his returns because he had gone back and read them; now his campaign says that there is no cause to inquire further, since they hired professionals to read them for us.