Not paying any taxes in 2009 is one hypothesis. I’ve heard two others. One is that he made a lot of money in 2009 by shorting the market. The other is that he took advantage of the IRS amnesty in 2009 to declare previously unreported off shore accounts. That would mean that he had been failing to report them in violation of law in previous years but has zero criminal liability because of the amnesty.
All of these scenarios are consistent with him having given 23 years of returns to the McCain campaign when he was being considered as McCain’s VP as 2009 hadn’t happened yet. The 23 years given to McCain seem to concentrate the focus for something he doesn’t want public in the years after he gave his info to McCain and before 2010, the year he has disclosed.
I personally think that the zero taxes in 2009 is unlikely. It could be very, very low as a percentage of his income, but he did get some income from speaking fees and such and only $3000 of that can be offset by capital losses. I’m not sure that having his tax rate be 5% for one year is all that overwhelming. And besides, you can spin it as not really being a 5% rate since there are real recognized losses in there. Yes, if someone adds the ordinary income and cap gains without the losses it will look outrageously low, but the cap losses are there too.
Shorting the market is also a possibility, but it would just show in his returns as a good year in investing when everyone else was doing poorly. Possible, but I don’t think his campaign has shown itself all that self-aware when it comes to understanding that people resent folks who appear to have information the rest of us don’t. And it would play into his “I understand the economy” meme. Possible but not that likely.
Oddly enough, that leaves the IRS amnesty as the most likely scenario. It wouldn’t be my normal first choice. The man has been running for president for a long time. You would think he would have started reporting the income off any foreign accounts a good long while ago since US citizens and residents are liable for taxes on their world wide income. But until the US got a bunch of Swiss banks to hand over the names of their US account holders, the likelihood of getting caught was essentially nil. It trends a little conspiracy theory for me, but I see this one as most likely.
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