Romney’s Tax Return — Paid More Than He Owed But Still Paid Minimal Taxes

The New York Times sees Romney’s tax return as a sign of how dysfunctional our tax system has become with all of the loopholes. Romney paid a smaller percentage of his income than most Americans pay in taxes, but it still appears he overpaid taxes on capital gains.

Despite this overcalculation, Romney’s tax team managed to keep his taxes abnormally low. Tax strategists used grantor trusts, foreign tax credits, and carried interests. One fortunate connection with Goldman Sachs produced a large amount of gains for Romney trusts. When Goldman Sachs went public in 1999, because Romney knew him, he was privy to information that allowed him to buy stocks at a low offering price early. Ultimately, Romney’s investment has led to $750,000 in capital gains.

See Floyed Norris, Romney Paid More Than He Owed, The New York Times, Jan. 26, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.