No doubt there will be “oohs” and “awws” when Mitt Romney releases his tax returns. He makes a helluva lot more money than the overwhelming majority of Americans. But beyond that trivia, what will a thorough review of Mitt Romney’s tax returns reveal? Well, thinking of my own returns here is what I think that you will find out:
1. The quality of his Certified Public Accountant (CPA). I haven’t done my own taxes in fifteen years. Though I don’t have the magnitude of Mitt Romney’s problems or the volume of his cash – quite frankly owning my own business makes taxes far too complex for the average Joe like me. I depend on the CPA who does my taxes to be honest and to advise me if anything I do looks even the least bit shady. My tax returns reflect my CPA’s professionalism, knowledge of current tax law, and what she requested from me.
2. How generous (or stingy) he is. When Joe Biden released his tax returns to the Nation during his run for Vice President I found out that on a much (much) smaller income my wife and I gave four to five times more to charity than Joe and Jill Biden did in each of the previous four years. I suspect that we will find out that Mitt and Ann Romney are very generous. History shows us that the people of the political right are infinitely more generous with their own funds than the people of the political left.
3. How sophisticated his advisors are. For the overwhelming majority of my life I have done my own financial planning. My results were mixed. A few years ago I started using the services of a Certified Financial Planner (CFP). So the major difference between my returns of several years ago and my recent returns is that my investment portfolio is more sophisticated.
“Money” magazine wasn’t making me a financial genius but using the services of a CFP might make me look like one. If my CFP made a case for me to buy shares in an off-shore investment product based in the Reading to reduce my taxes, I would probably run that by my CPA- but if she said “No problem, no red-flags.” I would do it. I suspect that Mitt’s advisors are pretty damn sophisticated. Caiman Islands
What we won’t find out is Mitt Romney’s commitment to the law or his sense of honesty. Indeed it is completely possible that Mitt Romney won’t be able to articulate more than a general approach to the structure of his estate and his tax and investment strategy.
My tax strategy is to pay the minimum tax specifically required by law while not sending up any red-flags that would alert the IRS to move against me. I pay every cent I owe and not a penny more.
My investment strategy is to maximize returns consistent with low risk and not to generate more taxable income than necessary. My favorite 1099 comes from my Virginia Tax Free Bond Fund account. Block #1 “Interest Income” is BLANK while block #8 “Tax-Exempt Interest” has a big number in it – I like that.
So with all that in mind the ONLY possible reason to demand Mitt Romney’s tax returns is to fuel class warfare. Shame on you Newt Gingrich.