FORTUNE — Happy Tax Day. That’s the thought that ran through my mind last week when I looked at President Obama’s 2011 tax return, which the White House released last Friday.
Forgive my skepticism—all right, I guess you can call it cynicism—but the more I look at Obama’s return, the more it strikes me as being much more a political document than a financial document.
Despite Obama having significant net worth, his return shows not a penny of tax-advantaged capital gains or dividend income. That’s a striking contrast to Mitt Romney’s 2010 return and projected 2011 return, which show income consisting primarily of low-taxed capital gains—some from investments, some from Romney’s share of the fees that his former employer, Bain Capital, collected as its share of its buyout investors’ gains. The latter, the so-called “carried interest” loophole, is the most egregious single piece of the personal income tax code, allowing investment managers to treat what is really fee income (taxable at up to 37.9%, including Medicare tax) as capital gains (taxable at 15%).
What’s more, politics, including Presidential politics, is clearly the reason the White House and Congressional Democrats are pushing for the Buffett Rule, which would establish a 30% federal tax rate for people with incomes of $1 million and up. (Not to be confused with millionaires, which I define as someone who’s worth $1 million or more.) The Buffett Rule has no chance of becoming law—but it makes for good talking points, especially on the Presidential campaign trail, where Obama will laud it and Romney will lacerate it.
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When I first read Romney’s 2010 tax return, which he released in January under pressure from his Republican opponents, I was shocked by how politically clueless it felt. Here were all sorts of games—obscure tax credits, a Swiss bank account—that were legitimate and above board, but didn’t save much money if any, and that looked and smelled bad to an average person.
I mean, come on. Romney has been running for President for years. You’d think that somewhere along the way, someone would have explained to him that it was better to pay a few extra bucks to the IRS and clean up his return for public consumption by foregoing some deductions and credits rather than having to explain a Swiss bank account and tacky-looking tax credits.
By contrast, Obama’s tax return is politically astute. Even his biggest tax maneuver—sticking $49,000 of his book income into a retirement plan—doesn’t leap out as egregious, the way Romney’s capital gain income does. Obama’s retirement deduction helps explain why his effective tax rate was 20.5% and mine was 25.1%, even though he earned more than twice what I did, and (since I’m not running for public office) my return shows tax-exempt income and tax-advantaged dividends.
By contrast to both Obama and me and to other people whose income comes primarily from work rather than from investments, Romney’s effective tax rate was only 13.9% in 2010, and was projected at 15.4% for 2011.
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It will be interesting to see if Romney’s people figure out how to handle his 2011 situation without kicking off another storm of coverage. For 2010, Romney’s tax advisers took advantage of the automatic six-month extension available to most taxpayers, and filed his return on Oct. 15, 2011. If he files his 2011 return this October, it will hit at the height of the Presidential campaign. I can’t imagine that his outfit is that clueless—but then again, there is that 2010 return.
So Happy Tax Day. And let’s hope that next year, things will have calmed down enough in our country for the Presidential tax return to be a financial document, not a political one.
