“Dirty Liar Harry”: Republicans Have Just About Had It With Harry Reid On Romney’s Tax Return Story
Good afternoon: It’s Sunday, August 5th, 2012, and Mitt Romney has still not released more than two-years’ worth of tax returns. Why is that? Only Mitt and Rafalca know for sure. The rest of us poor souls must continue to sit here and speculate, potentially forever. As you are perhaps aware, Harry Reid has floated one improbable explanation for the secrecy surrounding the documents, which is that Romney did not pay taxes for a decade. The candidate has, of course, denied this, but Reid keeps pushing back, forcing Romney’s surrogates to attack him and thereby ensuring that the story — and the general tax return theme — remain in the news.
Republican National Committee Chairman Reince Priebus got particularly feisty on ABC’s This Week, calling Reid a “dirty liar who hasn’t filed a single page of tax returns himself, complains about people with money but lives in the Ritz Carlton here down the street.” Senator Lindsey Graham called Reid’s accusations “out of bounds,” while Virginia governor Bob McDonnell said they were “reckless and slanderous.” McDonnell added that, “People don’t care about Mitt Romney’s tax returns. They are [worried] about their own tax returns,” which would probably be mostly true in a world in which Mitt Romney had released more tax returns.
Meanwhile, the Democrats did their best to contain their glee over the situation, with varying degrees of success. Former Pennsylvania governor Ed Rendell gently peer pressured Romney to share his filings, saying, “We all do it. It’s become commonplace in American politics…Mitt, go ahead and do it.” Obama campaign adviser Robert Gibbs suggested that Romney “go to Kinko’s,” where he could “put this to rest” by making copies of the documents for “a nickel a page.” (Gibbs was nice enough to offer to send him the nickels.):
“The whole world would know exactly what loopholes he’s taking advantage of,” alluding to Romney’s having placed some of his money in Switzerland and the Cayman Islands.
Asked repeatedly whether the Obama campaign in Chicago had told Reid to stop making those tax claims, Gibbs would only reply: “I don’t think anybody controls Harry Reid.
Democratic National Committee chairwoman Debbie Wassermann Schultz was more subdued: “This question is not just generated by Harry Reid,” she said. “It’s been asked by countless reporters, by voters that want to know more about Mitt Romney’s finances.” And David Axelrod stuck to what has become an Obama campaign mantra, asking, “Why don’t they just put this to rest? What is it that he’s hiding?”
Finally, Reid himself weighed in once again via a statement sent to Talking Points Memo this morning which read, in part, “It is sad that the most secretive candidate since Richard Nixon has forced his party to defend his decision to hide the truth about his tax returns.” Sad is one word for it.
By: Caroline Bankoff, Daily Intel, August 5, 2012
“Put Up Or Shut Up”: Mitt Romney Had The High Ground And Somehow Managed To Cede It
Sometimes, it’s possible to gain and lose the moral high ground very quickly.
When reporters shout intemperate questions at a candidate near Pilsudski Square in Warsaw, the candidate has gained the high ground. When the candidate’s aide tells the reporters, “Kiss my ass” and “Shove it,” the candidate has lost the high ground.
Similarly, Mitt Romney had the high ground when Senate Majority Leader Harry Reid (D-Nev.) made unfounded allegations about the Republican’s tax returns. And yet, he somehow managed to cede the high ground soon after.
For those unfamiliar with the story, Reid claimed he’d heard from a Bain Capital investor that Romney hadn’t paid income taxes for 10 years. Which investor? Reid didn’t say. Why should anyone take the claim seriously? Reid couldn’t say. He heard a rumor, and he’s passing it along.
Team Romney was furious and they had a point. The discourse can’t work this way — prominent officials need to be responsible when making attacks, and not just throw around second-hand innuendo, as if presidential candidates have a responsibility to respond to every unsupported rumor.
Romney had the high ground against a cheap shot. And then he gave it away.
“It’s time for Harry to put up or shut up,” Romney said on Sean Hannity’s radio show. […]
“Harry’s gonna have to describe who it is he spoke with because of course that’s totally and completely wrong,” Romney said Thursday in the radio interview. “It’s untrue, dishonest and inaccurate. It’s wrong. So I’m looking forward to have Harry reveal his sources and we’ll probably find out that it’s the White House.”
Is that so. Does Reid have any proof that Romney failed to pay taxes for 10 years? No, it’s just an unsubstantiated allegation that Reid carelessly pushed in the media. And does Romney have any proof that the White House is Reid’s secret source behind the attack? No, it’s just an unsubstantiated allegation that Romney carelessly pushed in the media. High ground, lost.
As for “put up or shut up,” is this really the phrase the guy who has been hiding his tax returns wants to use?
In recent weeks, Romney and his campaign spokespersons have claimed he always followed the law when paying his taxes and never paid an income tax rate of 0%. Romney also told a national television audience he’d be “happy to go back and look” to see how many years, if any, he paid a rate under 13.9%.
But these boasts are as dubious as Reid’s irresponsible claims — Romney has effectively told Americans we’re simply supposed to take his defense on faith. He could bolster his own rhetoric about his tax history with documented proof, but for reasons he can’t explain, Romney doesn’t want to.
The message: just take his word for it. And what about his willingness to happily go back and look at his paid income tax rates? Apparently, Romney intends to break this commitment just days after making it.
This is not how one keeps the moral high ground.
For Reid’s part, the Senate Majority Leader issued a statement last night that stands by the original allegations.
“There is a controversy because the Republican presidential nominee, Governor Mitt Romney, refuses to release his tax returns. As I said before, I was told by an extremely credible source that Romney has not paid taxes for ten years. People who make as much money as Mitt Romney have many tricks at their disposal to avoid paying taxes. We already know that Romney has exploited many of these loopholes, stashing his money in secret, overseas accounts in places like Switzerland and the Cayman Islands.
“Last weekend, Governor Romney promised that he would check his tax returns and let the American people know whether he ever paid a rate lower than 13.9 percent. One day later, his campaign raced to say he had no intention of putting out any further information.
“When it comes to answering the legitimate questions the American people have about whether he avoided paying his fair share in taxes or why he opened a Swiss bank account, Romney has shut up. But as a presidential candidate, it’s his obligation to put up, and release several years’ worth of tax returns just like nominees of both parties have done for decades.
“It’s clear Romney is hiding something, and the American people deserve to know what it is. Whatever Romney’s hiding probably speaks volumes about how he would approach issues that directly impact middle-class families, like tax reform and the economy. When you are running for president, you should be an open book.
“I understand Romney is concerned that many people, Democrats and Republicans, have been calling on him to release his tax returns. He has so far refused. There is only one thing he can do to clear this up, and that’s release his tax returns.”
The issue isn’t going away.
By: Steve Benen, The Maddow Blog, August 3, 2012
“Mitt’s Financial Mysteries”: Romney Didn’t Send His Money Overseas For The Weather
PRESSURE is mounting for Mitt Romney to release more of his financial records. Mr. Romney has made public only his 2010 tax returns and has said his 2011 documents will be released soon. “That’s all that’s necessary for people to understand something about my finances,” he said recently. He is “simply not enthusiastic,” he also said, about giving the Obama campaign “hundreds or thousands of more pages to pick through, distort and lie about.”
But it is a good bet that Mr. Romney’s vetters have picked through more than two years of returns of his vice-presidential contenders. And the Senate typically requires more for confirmation to a cabinet or even a subcabinet post. Until Mr. Romney recognizes the right of voters to understand the finances of their leaders, all we are left with is speculation.
Some commentators have suggested, for example, that — like tens of thousands of other Americans who have taken advantage of an Internal Revenue Service amnesty — he might not have declared and paid taxes on his Swiss bank account. I can’t imagine that he would have engaged in such blatant tax cheating. He is far too smart for that.
Another suggestion is that in 2009 he paid income taxes significantly below the 13.9 percent he paid in 2010. This is more plausible, and potentially more damaging politically, even if perfectly legal.
After all, the one year’s tax returns that he has released raise doubt about his campaign’s claims that his offshore accounts did not save him one penny of tax. Putting business assets into an individual retirement account invested in a Cayman Islands corporation allows Mr. Romney to avoid the “unrelated business income tax” — a 35 percent levy — on at least some of his I.R.A.’s earnings, a tax that he would have had to pay if his I.R.A. were held directly by a financial institution in the United States.
With an I.R.A. account of $20 million to $101 million, the tax savings would be more than a few pennies.
The I.R.A. also allows Mr. Romney to diversify his large holdings tax-free, avoiding the 15 percent tax on capital gains that would otherwise apply. His financial disclosure further reveals that his I.R.A. freed him from paying currently the 35 percent income tax on hundreds of thousands of dollars of interest income each year.
Given the extraordinary size of his I.R.A., we have to presume that Mr. Romney valued the assets he put in his retirement account at far less than he would have sold them for. Otherwise it is quite a trick to turn contributions that are limited to $30,000 to $50,000 a year into the $20 million to $101 million he now has there. But we cannot be certain; his meager disclosure of tax records and financial information does not indicate what kind of assets were put into the I.R.A.
Mr. Romney’s Cayman Islands and Bermuda corporations also probably allowed him to avoid limitations on deductions for investment expenditures that would otherwise apply. So we don’t need any more tax returns to know that Mr. Romney is an Olympic-level athlete at the tax avoidance game. Rich people don’t send their money to Bermuda or the Cayman Islands for the weather.
Moreover, we have no clue whether Mr. Romney paid any gift tax on transfers, now valued at $100 million, to a trust he set up in 1995 for the benefit of his five sons. Until this year, the federal gift tax had a lifetime exemption of $1 million, and it taxed gifts in excess of that amount at rates between 29 and 44 percent. A gift of $100 million to one’s children could, therefore, require paying a tax of as much as $29 million to $44 million.
But every good tax professional knows that gift tax returns are rarely audited, except after the transferor’s death. And normally the I.R.S. cannot challenge such a return after three years from its filing. But if the values of the gifts were not properly appraised and disclosed on Mr. Romney’s gift tax returns, a challenge may still be possible. If he did not file any gift tax return, he would still be liable for the tax, plus interest and penalties.
Based on his aggressive tax planning, revealed in the 2010 returns he has released and his approval of a notably dicey tax avoidance strategy in 1994 when he headed the audit committee of the board of Marriott International, my bet is that — if Mr. Romney filed a gift tax return for these transfers at all — he put a low or even zero value on the gifts, certainly a small fraction of the price at which he would have sold the transferred assets to an unrelated party. Otherwise, he should be happy to release his gift tax returns. According to a partner at Mr. Romney’s trustee’s law firm, valuing carried interests, such as Mr. Romney’s interests in the private equity company Bain Capital, at zero for gift tax purposes was common advice given to clients like Mr. Romney in the 1990s and early 2000s.
If detected, undervaluing large gifts to one’s children could provoke large penalties from the I.R.S. These are the kinds of tax penalties that even multinational corporations try to avoid because they fear how the public would react to the adverse publicity that would inevitably follow.
To settle these questions, Mr. Romney should release his gift tax returns, or other documents showing how he valued his transfers to his family’s trust and to his I.R.A., and at least three additional years of income tax returns.
No one should begrudge Mr. Romney or his family the wealth they have earned. But if he has not paid the taxes that apply to transfers of such wealth, this should concern us all. After all, who do you think pays for the shortfall?
By: Michael Graetz, Op-Ed Contributor, The New York Times Opinion Pages, July 30, 2012
“The Exotic Manipulation Of Numbers”: The Secret In Mitt Romney’s Tax Returns
To paraphrase Rhett Butler, I don’t give a damn if Mitt Romney releases more of his tax returns. I expect to learn nothing from them, aside from the fact that he is very rich and has paid less in taxes than he has acknowledged. He has probably taken advantage of all the loops and dodges in the tax code, piling trusts on top of trusts, securing wealth for Romneys yet unborn — gelt unto the third generation, little taxed, slightly taxed or taxed not at all.
“Let me tell you about the very rich,” F. Scott Fitzgerald once wrote. ’Scuse me, Scotty, let me tell you about them: They don’t pay much in taxes.
This is what the average person would learn if all of Romney’s tax filings hit the light of day. He has so far divulged just his 2010 return and the estimate for 2011, and the Obama camp, smelling blood, has demanded more. The din has reached such a level that even some conservatives are entreating Romney to reveal additional filings. They are not, however, imploring their candidate to identify his bundlers — for this might actually reveal who has their hooks into him. The filings, I promise you, will show loopholes and financial black holes that make taxable income disappear. What we will not see is anything revelatory or, as some insist, genuine insights into the character of the candidate.
Certainly, this has been the case in the past. Richard Nixon disclosed his taxes preceding the 1968 presidential campaign. He reported hefty earnings averaging $200,000 in his years as a New York lawyer, but there was nothing in the forms relating to occasional bouts of drunkenness, paranoia, excessive self-pity or a proclivity to listen to the telephone conversations of others.
Similarly, Bill Clinton, in his pre-White House filings, showed a gross 1990 income of $268,646, but the box (32a) relating to possible extramarital relations in the Oval Office was left blank. No doubt it was an oversight.
George W. Bush’s tax forms were as vacant as he was of any suggestion that he moved his lips when he read and would, if given the chance, tank the economy and lead the nation into two wars, mismanaging both.
By and large, the tax filings tell you nothing you don’t already know. But the refusal to release them is a different matter. In Romney’s case, this is his one and only stand on principle, an odd example of political bravery. He has flipped on abortion, gun control and, of course, health-insurance reform, his signature achievement as governor of Massachusetts. But not on releasing his taxes. Others have been recalcitrant. Ronald Reagan didn’t want to do it (he charged his daughter Maureen interest on a loan) but ultimately did.
In general, presidential and vice presidential candidates have released their returns. Maybe this was because most of them were public servants whose salaries were already known and whose wealth was modest. Others, though, were persons of considerable wealth — Lloyd Bentsen, John Kerry, John Edwards — who laid it all out on the table. (I wonder if Edwards, if he still had presidential prospects, would have deducted his latest child.)
It’s impossible to know what Romney is not revealing. But it is instructive to contrast him to his father, George, who was an auto executive and governor of Michigan. When George Romney ran for president in 1968, he released 12 years of income tax returns. But he was essentially salaried — his remuneration set either by statute or by a board of directors — and so really he was divulging little. Maybe more important, he actually made something (cars) or did something (governed). His son not only manufactured nothing but earned his wealth the new way — by financial manipulation, leveraging and such. On paper, it could look ugly.
For Mitt Romney, there are no assembly lines, no factories or mines — just back offices and computer terminals and such esoterica as the infinitesimal difference between what the Libor rate should be and what it is. He was loyal to no company, no industry — just to his investors. The making of such money is concealed, based on the exotic manipulation of numbers and the disregard of people. Only a relatively few know how to do this sort of thing, and they don’t much like to talk about it. Romney, as we already know, is one of those people. He hides his taxes not because it would reveal anything new about him, but because it would reveal what he has always known about us: We’re suckers.
By: Richard Cohen, Opinion Writer, The washington Post, July 23, 2012
“Absentee Owner”: New Bain Questions To Dog Romney And They Are Not About Seamus
Though much of the nation’s attention has shifted to the tragic overnight violence in Aurora, Colorado, the political world will apparently move forward. Republican presidential hopeful Mitt Romney had already scheduled a campaign event in New Hampshire, and his staff alerted reporters this morning that their plans have not changed.
With that in mind, there are new questions about the candidate’s controversial private-sector background that deserve answers. The Boston Globe has this new report, for example, noting Romney’s ongoing ties to Bain Capital after his departure in February 1999.
Interviews with a half-dozen of Romney’s former partners and associates, as well as public records, show that he was not merely an absentee owner during this period. He signed dozens of company documents, including filings with regulators on a vast array of Bain’s investment entities. And he drove the complex negotiations over his own large severance package, a deal that was critical to the firm’s future without him, according to his former associates.
Indeed, by remaining CEO and sole shareholder, Romney held on to his leverage in the talks that resulted in his generous 10-year retirement package, according to former associates.
“The elephant in the room was not whether Mitt was involved in investment decisions but Mitt’s retention of control of the firm and therefore his ability to extract a huge economic benefit by delaying his giving up of that control,” said one former associate.
So, on the one hand, we see Mitt Romney telling voters, “I was in Utah full time. I had no responsibility for management at Bain Capital.” On the other hand, we see evidence that Romney was not in Utah full time and had quite a few responsibilities for management of Bain Capital.
In the meantime, David Corn has a new report on Bain, during Romney’s tenure, investing millions in a pair of companies that specialized in outsourcing high-tech manufacturing.
As for the still-hidden tax returns, the number of Republicans urging Romney to disclose more materials continues to grow.
By: Steve Benen, The Maddow Blog, July 20, 2012
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