Why Romney May Have Told a Bain Investor He Paid No Taxes for Ten Years

Harry Reid says a Bain investor told him that Mitt Romney didn’t pay income taxes for ten years. Reid’s chief of staff, David Krone, says he knows the identity of Reid’s source, and that this person is credible.

But reporters ask: Why would a Bain investor know whether Romney personally paid income taxes?

There is a possible answer to that question. It’s conceivable that Romney tried to persuade someone to invest in Bain Capital by telling him that the investment would yield large tax breaks. Romney may have told the putative investor that by taking advantage of the tax breaks himself, he had not paid any income taxes for ten years. He may even have provided this individual or his accountants with details.

If that’s the case, Romney probably made this representation to the investor while he was still managing Bain Capital. Romney became president of the Salt Lake City Olympics committee in 1999, and he would have been referring to a ten-year period that ended no later than the 1998 tax year.

I want to stress that this is pure speculation on my part. I make no judgment whatsoever about whether the scenario I’ve posited is likely. Nor do I pass judgment about the propriety of Senator Reid’s making his accusation based on an anonymous source. My sole point is that it is conceivable that Romney might have given a Bain Capital investor information about his personal tax situation.

One additional thought: Romney claims that Reid’s accusation is not true. Reporters might consider following up by asking Romney whether there was any period of years – not necessarily the most recent period – during which he paid no federal income taxes.

(You can access a CNN report about David Krone’s statement, with reporters asking why a Bain investor would know anything about Romney’s tax returns, here.)