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Politifact Backs Romney on Tax Issue

Fact-checking website Politifact — which has had a mixed record refereeing the election so far — gave Sen. Harry Reid a “pants-on-fire” rating for his charge that Mitt Romney didn’t pay taxes for 10 years.

In an Internal Revenue Service study of nearly 4 million 2009 tax returns of filers reporting more than $200,000 in adjusted gross income, 20,752 of these taxpayers — or just 0.529 percent — had no U.S. income tax liability. About half of those did have income tax liability in other countries. …

To gauge tax patterns for even higher-income earners, the best we can do is to look at another IRS study detailing the taxes paid by the top 400 earners in the nation in 2008. To make this list, you would have to have earned roughly $109 million that year. Among those 400 top taxpayers, 30 — or 7.5 percent — had an effective tax rate of between 0 and 10 percent. Given how the statistics are calculated, it’s impossible to know how many paid no taxes, but it’s safe to assume it’s well below 7.5 percent.

Neither study directly addresses Romney’s situation — he falls somewhere in the middle of the two studies — but the data does show that for earners both below and above him, it’s unlikely they paid zero taxes for one year, and it’s even more far-fetched to think they did so for 10 years.

Politifact also quoted tax experts and economists who agree that it’s highly unlikely Romney avoided paying taxes for 10 years. Phil Klein points out that it’s impossible to know for sure without actually seeing Romney’s tax returns — which is precisely what makes Reid’s accusations so slimy — but this is the closest Romney is going to get to debunking the charges without coughing up the papers.

The Romney campaign can now say Reid’s accusations were debunked by fact-checkers, but it’s not going to be enough to stop the smears.