A CURIOUSLY OMITTED WORD IN ROMNEY'S "NOTE FROM TRUSTEE"

Here are two lines from the "Note from Trustee Brad Malt," which accompanies Mitt Romney's tax disclosure (his 2011 returns plus a summary of twenty previous years of returns). The two lines in the Brad Malt note summarize a letter from the accounting firm PricewaterhouseCoopers:

* Over the entire 20-year period, the average annual effective federal tax rate was 20.20%.

* Over the entire 20-year period, the lowest annual effective federal personal tax rate was 13.66%.

Notice that the word "personal" is left out of that first bullet point, but not out of the second one.

The odd thing is that in the PWC letter itself, the word "personal" appears both times:

* The lowest of any annual "effective federal personal income tax rate" for any year during the period is 13.66%....

* The average of the annual "effective federal personal income tax rates" as computed based on the returns as prepared during the period is 20.20%.

The trustee is telling us that the Romneys' average tax rate over twenty years was 20.20%, but the accountants are saying that was their average personal rate.

Why does this matter? It may matter because, as Rick Newman of U.S. News notes, the Romneys have investment trusts and other financial instruments that are legally separate from themselves for tax purposes, so the trusts' tax burdens -- or lack thereof -- technically don't count as part of the Romney's "personal" tax rate:

The Romney campaign now says that since 1990, "the lowest annual effective federal personal tax rate" Romney paid was 13.66 percent. In other words, the rate on what might be characterized as his personal income never fell below that threshold.

But that doesn't account for the three trusts, or other investment vehicles that may have existed prior to 2010. And it's unusual to limit the claim to "personal" taxes when Romney has acknowledged other types of income. So it's possible that the effective tax rate on the trusts was very low at some point -- and maybe even zero, which would have indicated a net loss for the year.

Why would the Brad Malt note omit the word "personal" with regard to the twenty-year average of tax rates?

Here's a guess: so that the right-wing media could use a quote from Malt's note in its attempt to spin this, without worrying about that complicating word. And, well, what do you know: Here's The Weekly Standard doing just that.

Romney's Tax Rate Equal to What Obama Paid Last Year

According to a statement released by the Romney campaign that summarizes the rate of taxes the Republican presidential nominee paid between 1990 and 2009, the rate at which Mitt Romney paid taxes is approximately equal to what President Barack Obama paid last year.

"Over the entire 20-year period, the average annual effective federal tax rate was 20.20%," the Romney campaign states....

The Standard story is, you will not be surprised to learn, the lead item at Fox Nation right now.

If the word "personal" were in that quote, it might raise eyebrows. But it's omitted, which makes the Romney campaign's pushback a wee bit easier.

I'm sure trustee Malt, if pressed, would say the omission of the word was a mere oversight. But I'd like him to be asked about it.

*****

This, of course, is in addition to the fact that that 20.20% figure is misleading, because it's just taking the percentages over twenty years and averaging them, rather than totaling up the income and taxes paid and determining the average that way. Confused? Greg Sargent explains:

If Romney paid his lowest rates in a number of the higher income years, the overall 20 percent figure would overstate the rate he actually paid over the whole period. [Roberton] Williams [of the Tax Policy Center] provided the following purely hypothetical example:

"Let's say you have 10 years in which you paid 13 percent in taxes, and 10 years in which you paid 27 percent," Williams told me. "If you average those rates, you'll get an overall rate of 20 percent. But if the 13 percent years were high income years, and the 27 percent years were low income years, then his total taxes paid as a share of total income over the 20 years would be less, perhaps significantly less, than 20 percent."

Oh and, as Forbes notes,

The Romneys' rate was higher in earlier years because ... the top tax rate on long term capital gains and dividends, which make up most of their income, have been cut.

So even if you disregard the weaselly way their twenty-year tax rate is calculated, and even if you ignore the question of whether it's the rate that covers their entire financial portfolio (including trusts), one reason their rate looks high is that they had to pay a higher tax rate under the law in pre-Bush (and pre-Clinton second term) years.