10 Reasons Mitt Romney Is In Trouble Over His Taxes

Posted by Fullcouch on January 19, 2012, 2:30pm

Daily Mail – It was all so avoidable. All Mitt Romney needed to do in Monday night’s debate when Rick Perry (in what may turn out to be his most enduring contribution to the 2012 race) asked him about his tax returns was to state that he would release them in April if he was the presumptive nominee.

That would have made news. He’d have agreed to disclose at the stage party nominees normally disclose and although his rivals would have kept demanding the returns now he’d have been able to stonewall fairly easily. Instead, he completely failed to answer the question. The following morning, yesterday, he was pressed into revealing that he paid a tax rate of just 15 percent on most of his income.

Here’s why Romney’s in big trouble over this:

1. This is a problem of his own making and will therefore give Republicans pause

Romney completely ignored Perry’s question. Even though that bought him some time, when the WSJ’s Kelly Evans, inevitably, brought it up again he gave a weirdly evasive and indecisive answer.

He initially said: “You know, I, I looked at what has been done in, in campaigns in the past, with Senator McCain and President George W. Bush and others. They’ve tended to release tax records in April, or tax season. I hadn’t planned on releasing tax records, because the law requires us to release all of our assets, all the things we own.

“That I’ve already released; it’s a pretty full disclosure. But, but, you know, if, if that’s been the tradition, then I’m not opposed to doing that. Time will tell. But I anticipate that most likely I’m going to get asked to do that around the April time period, and I’ll keep that open.”

When Evans asked simply, “Governor, you will plan, then, to release your income tax records around April?” it got even worse. Romney responded: “I, I think I’ve heard enough from folks saying, look, you know, let’s see your tax records. I have nothing in, in them that, to suggest there’s any problem, and I’m happy to do so.

“I, I, I, I sort of feel like we’re, we’re showing a lot of exposure at this point, and if I become our nominee I’m, and what’s happened in history is people have released them in about April of the coming year, and that’s probably what I’d do.”

A dreadful response. Although Romney has performed extremely well in the debates, this is not the kind of answer a Republican nominee should be giving in a debate against President Barack Obama in the autumn.

2. Chris Christie has said he needs to release his tax returns

This morning, Christie, a top Romney surrogate, charged straight off the reservation and said on NBC: “I would say if you have tax returns to put out, you know, you should put them out sooner rather than later, because it’s always better in my view to have complete disclosure, especially as the frontrunner.”

That effectively gives Romney little choice but to get his tax returns out this week. Otherwise, he’s going to get hammered in tomorrow’s debate in Charleston and it’ll look like he really goes have something to hide.

3. Romney’s own father released his tax returns early in the 1968 campaign

This boxes Romney in morally as well as politically. It could also make him extremely uncomfortable if confronted with his father’s own words in a debate. Romney reveres his father and is an intenseley private man. Again, it pushes him towards disclosure right now.

4. The Mormon thing

It’s barely reared its head here in South Carolina but from the Romney campaign’s point of view, I suspect, the tax issue is principally the Mormon issue. Throughout his life, Romney has tithed 10 percent of his income to charity. That’s a collosal amount of money – millions and millions of dollars.

Naturally, this money will have gone principally to Mormon-linked organisations. The tax returns will disclose which ones and prompt the media to crawl all over them asking questions about the charities, their practices and their rules. Quite sensibly, the Romney campaign doesn’t want this to happen until he’s got the nomination safey wrapped up.

5. Offshore investments

The peerless Brian Ross and his ABC colleagues report that Romney – as well as Bain Capital – has substantial offshore investments. They’re still subject to American tax laws but as Ross and Co point out these accounts “provided him – and Bain – with other potential financial benefits, such as higher management fees and greater foreign interest, all at the expense of the US Treasury”. For US Treasury, read American taxpayers.

6. Timing

The timing couldn’t be worse. There are just two full days before voting on Saturday. In the middle of that, there’s a debate. If Romney releases his tax returns, that will dominate the last 48 hours. If he doesn’t, his refusal will dominate just as much. It’s a Catch-22 situation. His best hope has to be that he’s far enough ahead in South Carolina for it not to matter and he wins anyway, even if it’s a squeaker.

7. The 15 percent rate plays right into Newt Gingrich’s hands

Gingrich is an erratic and undisciplined campaigner. But he’s also a clever and nimble one when the opportunity presents itself and he’s in the right mood. Gingrich already had a 15-percent flat tax plan.

After Romney revealed his tax rate, Gingrich quipped: “I think we ought to rename our flat tax,” Gingrich said Tuesday on the campaign trail. “We have a 15 percent flat tax. So this would be the ‘Mitt Romney flat tax’ that all Americans could then pay the rate Romney paid. I think that’s terrific.”

This is much better terrain for Gingrich that the class-warfare attacks on Romney’s time at Bain because it allows him to mock Romney while at the same time making a conservative case for a lower, flat tax rate for all.

8. Most Americans pay a much higher rate than 15 percent

America’s tax system is a complete mess. You need a degree in accountancy to understand it. There are some very good reasons for having low tax rates for investments. But Gingrich’s tax rate last year was 31 percent and Obama’s about 25 percent. Once you get into parsing the reasons for this on the stump then you’ve lost the argument.

Class warfare and proposals to increase taxes on the wealthy are hardly likely to turn the tide in a Republican primary battle. But there’s a real inequity here and it does not help Romney at all.

9. This feeds the “out of touch” meme about Romney

At the same time as revealing his 15 percent rate, Romney remarked that he earned “not very much” from speaking fees. In fact, he earned $374,327 from speaking fees last year – putting him way up in the top one percent of Americans.

This shows the same sort of tin ear as exhibited by Gingrich when he said that he made $60,000 a speech and was therefore incorruptible (the average household income for a family of four in South Carolina is about $58,000). After “I’m also unemployed” , “corporations are people”, $10,000 bets, “pink slips” and “I like firing people” it’s yet another unforced error by Romney on a similar theme.

10. The psychological effect – it hits Romney in a place where he feels beyond reproach

When John Kerry was assailed over his Vietnam war record in the 2004 campaign, the effectiveness of the attack was not just that it questioned Kerry’s truthfulness and even patriotism but that it hit him where it really hurt.

Kerry thought that Vietnam would be a huge net positive for him. When it suddenly looked like it could be an albatross it was a disorientating experience. The same thing is true of Romney and taxes. It goes to his business record with Bain and his charitable giving (colossal by the standards of any American).

Romney expected attacks on healthcare and flip-flopping. Having to defend himself on his business record and his personal wealth in a Republican primary could ruffle his usual calm – he’s proved brittle before in debates (particularly in the 2008 campaign) so tomorrow night will be a big test for him.

Why Mitt Romney is in trouble over his taxes

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