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What we don't know about Romney's money

April 6, 2012: 4:04 PM ET

Presidential hopeful Mitt Romney on the campaign trail.

Mitt Romney's tax returns for 2010 and 2011 were released in January, but revelatory details are still trickling out in the press, underscoring just how complex the private equity star's holdings are.

The headline numbers are simple enough. The documents show that Romney made $42.7 million over the past two years and paid $6.2 million in taxes. He paid an effective tax rate of 14.5%.

His personal financial disclosure form, filed with the Federal Election Commission, has been in the public domain for even longer. The document contains page after page of assets held by the former Massachusetts governor, including the so-called blind trust that contains the bulk of his wealth.

But the listed assets are described only in a limited fashion. As the Washington Post reported earlier this week, Romney is taking advantage of an ethics exemption that allows him "to postpone revealing underlying assets in investment accounts that have a legally binding confidentiality agreement."

Basically, we know Romney has money in specific accounts, but the underlying assets remain a mystery.

And last week, the Wall Street Journal offered the most convincing explanation yet as to how Romney stuffed an IRA with between $20 and $100 million. Turns out, Bain Capital, the private equity firm Romney ran, allows employees to co-invest in takeover deals via tax-deferred retirement accounts, a strategy capable of bringing 583-fold returns on investment.

Now, of course, Romney has not done anything illegal or improper. But if elected, he would be one of the richest presidents in history. And certainly the first private equity man.

The breadth and complexity of Romney's investments, and the fact that only two years of returns have been released, make it difficult to put together a complete and accurate analysis of his holdings --just witness how long it took to figure out how that IRA got so big.

The Romney campaign has no apparent plan to release additional tax returns. The Obama campaign is eager to point this out, as their candidate has already made public many years of relatively straightforward returns.

Releasing multiple years of returns (Romney's father released 12 years-worth when he ran for president) would allow for a better look at how Romney's assets evolved over time. This would be useful in the way a movie can relate more information than a snapshot.

The Obama camp is unlikely to ease its badgering of Romney to release more tax returns, leaving the challenger's advisers in a bind. Releasing more returns could open old wounds -- especially if nasty little items like Cayman Island funds are peppered throughout. But for a candidate running in large part on his business acumen, more returns might also lift the cloud of suspicion the Obama campaign is so desperately trying to attach to the issue.

And who knows, the country might even have a productive conversation about the tax system in the process.

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About This Author
Charles Riley
Charles Riley
Reporter, CNNMoney

Charles Riley lives and works in Hong Kong, where he covers markets, economics and other high-impact stories across Asia. He previously worked for CNNMoney in New York and CNN in Washington. He tweets @CRrileyCNN

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