Phoenix, AZ (PRWEB) September 06, 2012
Recently the personal tax returns of the presidential candidates have become hot topics in the media. President Obama has asked Romney to release five years of tax returns since he’s already provided twelve years. Both candidate tax returns can be viewed at http://www.taxhistory.org. Randall Sorensen, CPA and Certified in Financial Forensics decided to see what all the fuss was about by reviewing both candidate tax returns. During his analysis of President Obama’s 2001 Individual Tax Return, he found 10 math errors. The mistakes were all human arithmetic errors that would have been prevented by using a computerized tax program such as Turbo Tax.
Mr. Sorensen stated the following: "It would appear that three different drafts of President Obama’s 2001 tax return were prepared. The first draft calculated income tax liability of $79,046. This would have required taxable income of $271,263. In contrast, President Obama’s website shows 2001 taxable income of $250,444.” Why would the preparer of President Obama’s 2001 tax return pay income taxes on phantom income of $21,000? Why someone didn’t catch that President Obama overpaid his 2001 taxes by +$7,300 is a mystery?
President Obama was the clear winner on who paid the higher income tax rate amongst the two candidates. The President’s tax records for years 2000 through 2011 show that he paid an average tax rate of 25%. In comparison, challenger Mitt Romney paid an income tax rate of 14%. However, for every $1 of income tax paid by President Obama, Mitt Romney paid the US Treasury $7.
Sorensen also reviewed candidate charitable contributions. Mitt Romney significantly outpaced President Obama. Mr. Romney gifted 14% of his income compared to 6% by President Obama. Sorensen combined the candidate taxes and gift giving and coined the term “taxtribution” rate. (taxes+contributions/total income). In this category, President Obama spent an average of 31% of his income on taxes and charity. In comparison, Mitt Romney spent 28%.
In summary, President Obama can claim victory by saying that he paid a higher percentage of his income to Uncle Sam than Mitt Romney. However, given the propensity of government waste, Mitt Romney could make a compelling argument that his 28% directly benefited more Americans. Picking a victor could turn into a lively debate at any local coffee shop. Between now and November the American voter will be served up a tremendous amount of information that at times can be difficult to digest. Hopefully breaking down candidate taxes into some simple percentages will provide some clarification to voters. Mr. Sorensen plans to issue a second installment of his tax review. Mr. Sorensen states: “I identified a potential tax problem that could be a game changer to one of the candidates”.
Randall Sorensen, CPA has been practicing accounting for over 30 years and developed technology called Tax Return Score that provides an alternative method to measure a person’s creditworthiness. Sorensen’s accounting practice is located in Phoenix, Arizona. Mr. Sorensen can be reached at 480-752-0000.