Deal, a former congressman who is running against Democrat and former Gov. Roy Barnes, has come under intense scrutiny in recent weeks because he is so in debt that he's selling his home and because he didn't initially disclose some business loans.
Deal and his wife Sandra paid 2.95 percent - or $5,575 in federal taxes - on $188,904 in adjusted gross income in 2006, an Associated Press review of tax records shows. The following year, he paid 1 percent - or $2,068 - on $205,433 in income.
The average taxpayer in Deal's tax bracket pays about 17 percent in taxes, IRS data shows.
"I have paid the taxes that the law requires of me," Deal said at a recent debate.
Afterward, Deal told the AP that he suffered large carryover business losses from previous years but would not specify what they were. Records show Deal reported losses of $233,240 in 2006 and $53,520 in 2007. In 2007, he also listed a $2,439 farm loss. Deal's tax payments have inched back up since then, to 7 percent in 2008 and 11 percent in 2009.
The Deal campaign in August released cover pages for 29 years of taxes, but it has declined to provide more detailed schedules and other documents. The Republican candidate for Florida governor released three years of tax returns Friday night, ending months of speculation. One Georgia watchdog group said that given Deal's financial troubles, he should be more transparent.
"Rep. Deal may very well be our next governor and I believe the people of Georgia would be much more comfortable trusting him in that job if he was willing to give us the answer to these questions before we voted for him," said Bill Bozarth, head of Common Cause Georgia. "I think it's incumbent on the candidate to be as candid as possible with voters."
Barnes has repeatedly called on Deal to release his full tax returns and said recently that the low taxes paid by Deal - without records to explain why - raise questions.
"Nothing matches up," Barnes told the AP. "When somebody pays $2,000 in taxes on $200,000 in income, something is wrong."
Deal's spokesman brushed aside that argument.
"Nathan has paid every cent he owes in taxes, and he's had three accountants review all of his taxes to assure that every line of his tax forms is correct," spokesman Brian Robinson said.
Robinson said Deal cannot release detailed tax schedules without revealing the tax information of private individuals who are not seeking public office.
Bob Kamman, a Phoenix, Ariz.-based tax attorney, questioned that explanation.
"That's like saying I'm not going to show you my W-2 because it would reveal the confidential tax information about other employees in my company," Kamman said.
Kamman and Bill Nemeth, a tax preparer who is president of the Georgia Association of Enrolled Agents, agreed that Deal's tax payments for 2006 and 2007 are unusually low for his income bracket. But Nemeth added, "without more transparency it's pretty much impossible to say why."
Barnes has also had a few years of relatively low tax payments over the past decade - 8 percent of adjusted gross income in 2005 and 6 percent in 2004. Barnes has released full tax returns for 25 years which detail that, in both those years, the former governor donated large sums of money to charity - $386,585 in 2004 and $269,660 in 2005.
He also reported large losses for Barnes Law Group for those two years - $179,126 in 2004 and $451,314 in 2005, according to tax returns. The law firm became profitable in 2008 and the former governor's tax liability increased accordingly, records show. Barnes paid 24 percent in taxes on adjusted gross income for both 2009 and 2008.
Deal has been facing questions about his finances since it was revealed that he and his wife guaranteed a $2.3 million loan for Wilder Outdoors, a failed sporting goods store run by his daughter and son-in-law.
The Deals have put their Gainesville home on the market to help pay the debt. Deal also amended his state financial disclosure report to add $2.85 million in business loans for his auto salvage company, Gainesville Salvage Disposal, not included in the original filing.
The former congressman has maintained he will satisfy the debt. He has also said that his auto salvage business is profitable and that he was only an investor in Wilder Outdoors, meaning his losses would be minimal.
The source of the losses that drove down his tax bill remains unclear.
Deal's business holdings in 2006 and 2007 included Gainesville Salvage, which he co-owns with Ken Cronan. It would have had to file a separate tax return and would not have appeared on Deal's personal return, tax experts said.
Deal was also a partner with Cronan in C&D Investments and C&D Leasing, limited liability companies affiliated with the salvage business.
On his congressional disclosure form, Deal listed himself as a 50 percent partner in Wilder Outdoors. He has since said that he was simply an investor. Records do not show whether the company is the type that would have to be reported on Deal's personal tax forms.
http://accesswdun.com/article/2010/10/232211