Saturday, September 22, 2012

Taxes "owed" vs. taxes "paid" 

What's the difference between taxes owed and taxes paid?
Everyone is talking about how Romney's info dump yesterday showed that he did pay taxes between 1990 and 2009.
But PricewaterhouseCoopers said in the first bullet point that "each year during the period there were federal and state income taxes owed", and in the second bullet point "The lowest of any annual 'effective federal personal income tax rate' ... was 13.44 per cent".
Everybody is now reporting that Romney paid at least 13.44 per cent in federal income taxes annually between 1990 to 2009.
No, I don't think this is what those figures mean at all.
He "owed" income taxes every year -- of course, everyone who earns income owes taxes. Does this mean THAT HE ACTUALLY PAID ANY TAXES? How much you owe depends on income, but how much you pay depends on the deductions which can be found to offset the tax owing. And his annual tax rate was 13.44 per cent. Again, does this mean THAT HE ACTUALLY PAID THIS RATE? Again, it depends on the deductions which can be found to offset the rate.
The last carefully phrased bullet point tells the tale --it uses the terminology of "federal income taxes owed" and "state income taxes reported".
Harry Reid, I think you're going to be proved right after all.
Crossposted at Daily Kos.

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