By Justin Sink
The Democratic National Committee blasted Mitt Romney for "not paying his fair share" after tax returns released Tuesday showed that he owed less than 15 percent of his income in federal taxes.
"Mitt Romney used every loophole in the book available to the wealthiest and large corporations to avoid paying his fair share," Patrick Gaspard, the DNC executive director, said on a call with reporters Tuesday.
"There’s no doubt that he has not released sufficient information for Americans to be able to evaluate his investments and whether he has any financial conflicts that could cloud his judgment," Gaspard said. "When Romney was being vetted by John McCain's campaign, he thought McCain was entitled to 12 years of returns."
The DNC also questioned Romney's investment accounts based in "famous tax havens" like the Cayman Islands and Switzerland.
"These returns don't show how much he's avoiding," Gaspard said.
Romney's campaign insisted earlier in the day that the former governor of Massachusetts had satisfied his full tax obligation and that foreign investments were taxed at the same rate investments in the United States would be. Brad Malt, who administers Romney's investment accounts, described the characterization as "flatly wrong."
"The blind trust's investment in the Cayman Funds are taxed exactly the same as if Gov. Romney owned the shares directly and in the United States," Malt said.
"These are not accounts in any sense of the word, these are investments in third-party entities," he added. "Suppose I buy 100 shares of Toyota stock. I do not have a Japanese account. It's a foreign investment, not a foreign account."
The Democrats also produced Ed Kleinbard, a law professor at the University of South Carolina who served as chief of staff of the nonpartisan Joint Committee on Taxation, who argued that Romney's income from "carried interest" — categorized as "management fees" — is paid in a way that allows Romney to pay taxes at the capital gains rate of 15 percent. That's compared to 35 percent had it been taxed as wages — and it allows him to avoid paying Social Security or Medicare payroll taxes on the amount.
Kleinbard called carried interest "one of the principal ways by which people in his extraordinarily fortunate circumstance are able to compound their wealth at pre-tax rates."
Kleinbard added that he thought "Gov. Romney's tax returns and the tax positions he has espoused raise very important, fundamental questions about tax policy."
Gaspard noted that Romney "pays a lower tax rate than most teachers and firefighters."
Gaspard went on to say that Romney's closure "does not put the tax issue to rest" in a general election because running for president "requires absolute transparency and a trust bond with the American people."