July 20, 2012--Romney & the IRS
The Obama campaign is not letting go of its attack on Mitt Romney's time with Bain Capital and his income taxes. It is not the Obama Super PACs that are doing the heavy hitting, but ads prepared by the Obama campaign itself, with the "I-am-Barack-Obama-and-I -approved-of-this -message" included.
The ads that call into question Romney's last years at Bain, when more and more of their buy-outs included laying off American workers and out-sourcing their jobs to lower-wage countries, also include allusions to the fact that Romney has not released any tax forms from earlier than 2010.
His 2010 returns showed he made $27.1 million and paid slightly less than 15 percent in taxes, thanks in substantial part because of how much of his income was sheltered offshore in investments such as in the Cayman Islands. And he estimated that he earned $20.9 million in 2011, though we will not know if this is an accurate estimate since he will not file an actual return until after the election.
In the absence of evidence to the contrary, one is left to assume that Mitt Romney, unlike other candidates for the presidency (including his father who released 11 years worth when he ran in 1968), does not want to share any more returns since he knows that in earlier years there is information about even higher earnings than in 2010-11.
It is being speculated that as he realized he was becoming more and more a viable presidential nominee he had his tax people clean up his investment portfolio and tax returns since they were likely to be carefully scrutinized. So the more recent returns would look better than earlier ones, and that he would just stonewall about those prior to 2010. That refusing to turn over more tax returms would be a two-day story and he could get back to attacking Obama as not understanding the American economy or America itself. (Check the recent orchestrated comments from surrogates John Sununu, Michele Bachmann, and Rush Limbaugh who are once again questioning Obama's Americaness.)
Generally Obama is careful when it comes to broad campaign strategy, so it is unlikely that he would have his people, much less himself, so focused on Romney's corporate practices and personal finances unless they were feeling confident that there is fire where there is smoke.
Obama is betting the farm that once Romney is forced to release more information about his income and taxes they will reveal things about him that will more than confirm that he got rich as much in shady ways and through tax avoidance schemes as because he was a savvy entrepreneur who himself created businesses and jobs. If, on the other hand, Romney vamps for awhile and then releases, say, 10 years of tax documents and they show he earned his money the old fashioned way and paid his fair share of taxes Obama will likely lose the election.
The assumption, and hope, among Democrats (and an increasing number of even very conservative Republicans) is that he will be forced to show more and that what will potentially be most damaging is how much money he made during those 10 years.
My view is that this will not be Romney's biggest problem--that he made a bundle while most of the rest of us struggled to say solvent--but rather how little in taxes he paid.
In fact, I wouldn't be at all surprised if in 2008 and 2009 he paid no taxes at all.
Like most everyone else, even as hedged and sheltered as he was, I suspect that he had many investment loses during the years when the real estate bubble collapsed. Enough loses to offset most of his taxable income so that he owed the IRS nothing. It is even likely that during those down years he may have received tax refunds from quarterly tax "overpayments."
My own guess that he didn't do anything illegal. He didn't have to. The tax codes are set up to help people in the top one percent pay less tax in percentage terms than middle-income earners--case in point: Warren Buffett's secretary. But even if everything is legally aboveboard, the political fallout from having to reveal he paid no taxes would be substantial.
Imagine the Obama TV ads then--"While millions of Americans lost their jobs and house, Romney earned $X million and paid not one red cent in taxes. Blah, blah, blah."
One further, conspiratorial thought--Obama may have gone all-in not because he, like me, thinks there is political fodder to be gleaned from Romney's earlier tax statements. He doesn't have to think; he could easily know the specifics about Romney's filings. If Obama had some black-bag operative (or some smart computer-hacker kid) take a look at Romney's IRS file, well, it would be less like betting the farm than betting on a sure thing.
This is far from a nice thing to be suspecting--actually, it is repugnant to think Obama has his hands on this privileged information--but he wouldn't be the first president to snoop around in political opponents' IRS files. Nixon and Johnson, to keep this bipartisan, did this all the time.
Politics, after all, is not known to be pretty business.
The ads that call into question Romney's last years at Bain, when more and more of their buy-outs included laying off American workers and out-sourcing their jobs to lower-wage countries, also include allusions to the fact that Romney has not released any tax forms from earlier than 2010.
His 2010 returns showed he made $27.1 million and paid slightly less than 15 percent in taxes, thanks in substantial part because of how much of his income was sheltered offshore in investments such as in the Cayman Islands. And he estimated that he earned $20.9 million in 2011, though we will not know if this is an accurate estimate since he will not file an actual return until after the election.
In the absence of evidence to the contrary, one is left to assume that Mitt Romney, unlike other candidates for the presidency (including his father who released 11 years worth when he ran in 1968), does not want to share any more returns since he knows that in earlier years there is information about even higher earnings than in 2010-11.
It is being speculated that as he realized he was becoming more and more a viable presidential nominee he had his tax people clean up his investment portfolio and tax returns since they were likely to be carefully scrutinized. So the more recent returns would look better than earlier ones, and that he would just stonewall about those prior to 2010. That refusing to turn over more tax returms would be a two-day story and he could get back to attacking Obama as not understanding the American economy or America itself. (Check the recent orchestrated comments from surrogates John Sununu, Michele Bachmann, and Rush Limbaugh who are once again questioning Obama's Americaness.)
Generally Obama is careful when it comes to broad campaign strategy, so it is unlikely that he would have his people, much less himself, so focused on Romney's corporate practices and personal finances unless they were feeling confident that there is fire where there is smoke.
Obama is betting the farm that once Romney is forced to release more information about his income and taxes they will reveal things about him that will more than confirm that he got rich as much in shady ways and through tax avoidance schemes as because he was a savvy entrepreneur who himself created businesses and jobs. If, on the other hand, Romney vamps for awhile and then releases, say, 10 years of tax documents and they show he earned his money the old fashioned way and paid his fair share of taxes Obama will likely lose the election.
The assumption, and hope, among Democrats (and an increasing number of even very conservative Republicans) is that he will be forced to show more and that what will potentially be most damaging is how much money he made during those 10 years.
My view is that this will not be Romney's biggest problem--that he made a bundle while most of the rest of us struggled to say solvent--but rather how little in taxes he paid.
In fact, I wouldn't be at all surprised if in 2008 and 2009 he paid no taxes at all.
Like most everyone else, even as hedged and sheltered as he was, I suspect that he had many investment loses during the years when the real estate bubble collapsed. Enough loses to offset most of his taxable income so that he owed the IRS nothing. It is even likely that during those down years he may have received tax refunds from quarterly tax "overpayments."
My own guess that he didn't do anything illegal. He didn't have to. The tax codes are set up to help people in the top one percent pay less tax in percentage terms than middle-income earners--case in point: Warren Buffett's secretary. But even if everything is legally aboveboard, the political fallout from having to reveal he paid no taxes would be substantial.
Imagine the Obama TV ads then--"While millions of Americans lost their jobs and house, Romney earned $X million and paid not one red cent in taxes. Blah, blah, blah."
One further, conspiratorial thought--Obama may have gone all-in not because he, like me, thinks there is political fodder to be gleaned from Romney's earlier tax statements. He doesn't have to think; he could easily know the specifics about Romney's filings. If Obama had some black-bag operative (or some smart computer-hacker kid) take a look at Romney's IRS file, well, it would be less like betting the farm than betting on a sure thing.
This is far from a nice thing to be suspecting--actually, it is repugnant to think Obama has his hands on this privileged information--but he wouldn't be the first president to snoop around in political opponents' IRS files. Nixon and Johnson, to keep this bipartisan, did this all the time.
Politics, after all, is not known to be pretty business.
posted by Steven Zwerling at
4:56 AM
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