Romney's interesting denial of Reid's charge

Harry Reid's infamous charge, according to the Huffington Post:

"According a Bain investor, Reid charged, Romney didn't pay any taxes for 10 years."

“The word's out that he [Romney] hasn't paid any taxes for 10 years.”

— Senate Majority Leader Harry Reid (D-Nev.), on the floor of the U.S. Senate, Aug 2,
2012

"I was told by an extremely credible source that Romney has not paid taxes for 10 years. People who make as much money as Mitt Romney have many tricks at their disposal to avoid paying taxes,” Reid said Thursday

Mitt Romney strongly denied Sen. Harry Reid's repeated, insistent claims that he did not pay taxes for a decade during a press conference in the Senate Majority Leader's home state of Nevada on Friday.

"I have paid taxes every year, and a lot of taxes, so Harry is wrong," Romney told reporters.

"Harry Reid has to put up or shut up," he said. "Who are your sources?"

But isn't Romney's response an odd one? Because, if he has in fact paid taxes, he also knows that nobody could tell Harry Reid that he hadn't. So wouldn't the normal person say "Well, since each year I've paid taxes, so there can't be anybody who "knows" that I haven't, so either Harry Reid is lying, or somebody is lying to Harry Reid."

Instead he says "I've have paid taxes every year, and a lot of taxes, so Harry is wrong".

It's a subtle distinction, the difference between saying "Harry is lying, or the person who talked to him is lying" and "Harry is wrong".

Because, my bet is, Harry Reid's source was talking about income taxes, and Romney is talking about taxes aside from income taxes.

Because there are a lot of different kinds of taxes. Assume, for the moment, that Harry Reid is telling the truth (and I think he is). Almost certainly, the taxes he was told about by the anonymous Bain investor were Federal Income Taxes. But of course there are a lot of other taxes, state sales taxes and property taxes and excise taxes and social security taxes and medicare taxes, et cetera. So Romney could say "I paid taxes" and be not lying, and Harry Reid's source could say "Romney hasn't paid taxes for ten years" and also be not lying. But to me, the subtext in Romney's reply to the charge is less full-throated than it would be if the charge were not, in essence, true. So my belief is that Romney did, in fact go ten years without paying Federal Income Taxes. He made a lot of money and paid about as little tax as one can pay on it (via the capital gains tax versus the ordinary income tax), and he also had the opportunity, through Bain Capital, to arrange things so that he was able to deduct business losses to offset the already-low taxes on those gains.

Romney falls into the Scrooge McDuck archetype...too much just doesn't seem to be enough for him. If the system is there, he seems to have to game it. An IRA, designed for low and middle class persons to shelter income tax free so that they can have a little to supplement their social security after they retire? Romney takes that and turns that into a huge boondoggle. A generation-skipping trust for the kids, designed to subvert the inheritance tax? Yup, got that one, too. And I bet there has been a lot of give and take between various trusts over the years, as securities that would be more attractive to be out of the trust were swapped out, or in, or verse vice-a.