Henry Blodget says he doesn't think Mitt Romney is trying to hide anything illegal by refusing to release his tax returns. Rather, he thinks Romney simply doesn't want it to become clear just how carefully he's structured his income over the years. If it did, everyone would learn that:
- This "structuring" of income has likely taken full advantage of things like the ludicrous "carried interest" tax exemption that allows private-equity investors to pay capital gains taxes on income that is actually fees [This tax treatment is one of the most outrageous and unfair elements in the entire tax code. There is no logical basis for it, and it benefits only the richest people in the country.]
- This "structuring" has also likely taken advantage of offshore accounts, the contribution of hard-to-value securities at low valuations to Romney's IRA (whereupon they exploded in value), and other sophisticated tools. These tools are, theoretically, available to anyone, but, in practice, are available only to those with tens of thousands of dollars to spend every year on tax-and-estate planning.
- This structuring, which (let's be honest) is done primarily to avoid paying taxes, will look bad to most Americans, who will know instinctively that it's done to avoid paying taxes and that it's not something they will ever be able to afford to do — and, therefore, will seem unfair.
Maybe. Like Blodget, I also doubt that Romney has done anything illegal, and probably not anything that's even too close to the line. And yet, it somehow seems as though there must be a little more there than just evidence of aggressive tax avoidance. Blodget thinks that would outrage the American public, but I'm not sure I buy that unless there's some pretty shady stuff there. But then again, I'm not exactly plugged into the id of the average American. Maybe Blodget is right.