Everyone has by now heard that Harry Reid, the Nevada Democrat who heads the Senate, has reported that a "credible source" who is an investor/former business associate of Romney's at Bain Capital has told him that Romney paid no taxes for ten years. See Catalina Camia, Harry Reid not backing down on Romney tax claim, USA Today, Aug. 6, 2012. The statement was first made in the Huffington Post, and then repeated on the Senate floor. See Aamer Madhani, Harry Reid's Accusations Fan Flames over Romney's Taxes, USA Today (Aug. 5, 2012). Presumably, the source would have to be close enough to Romney that Romney has confided in him, or bragged to him about, his tax results in the past. (Based on what I've heard as well as some first hand experience with private equity folk and their typical braggadoccio, I'd not be surprised at all that there could have been a bragging match along the lines of--you won't believe what I pulled off for the 10th year in a row--zero federal income taxes!)
Now, if the information is correct, that would be disturbing, even for someone as rich as Romney and able to use sophisticated tax advisers (and we already know, having most of his income in the form of unearned capital gains rather than higher taxed earned wages/salary income). It would be disturbing because the rich are busy fighting any hint that they should pay tax at higher rates--such as pay tax on their unearned income at the same rate that we who toil daily pay on our earned income--by claiming that they already pay too much in taxes and that it is class warfare on the rich to suggest that parity with ordinary taxpayers would be fair. Taxes at less than 14%--the rate paid by Romney on his single released return for 2010--is an absurdity for someone making tens of millions a year for doing nothing. Taxes at zero percent is an obscenity.
But of course, that isn't the only possibility of what the tax returns, if released, might show. They may reveal even more characteristics of an oligarchic elite that believes itself above the law. Various prior postings have explored questions that can't be answered from looking at one year's returns--from hobby horse to business horse and passive activities. Of course, we already know that Romney is not squeamish about abusive tax shelters. (See Part IV of this series on Romney's audit committee approval of Marriot International's Son of Boss tax shelter scam.) The public wants to know, and the public should know before voting for a candidate.
Romney's attack dogs in the GOP have taken an increasingly snarling approach that borders on the ridiculous. RNC chairman Reince Priebus called Reid a "dirty liar". Catalina Camia, Harry Reid not backing down on Romney tax claim, USA Today, Aug. 6, 2012. Other Republicans appeared on Sunday news shows, like Sen. Graham (R-S.C.) who said he thought Reid was lying, and Va. Gov. Bob McDonnell on Face the Nation, who decried the "reckless and slanderous charge". See Eugene Robinson, Warring over tax returns, Washington Post (Aug. 2012). Romney's own response so far is tone-deaf--that he won't release more returns. To Fox News' Sean Hannity last Thursday he added that "it's time for Harry to put up or shut up. Harry's going to have to describe who it is he spoke with because of course, that's totally and completely wrong. It's untrue, dishonest and inaccurate. It's wrong. So I'm looking forward to have Harry reveal his sources." Sam Stein, Mitt Romney to Harry Reid on Tax Dodge, Huff Post (Aug. 2, 2012, updated Aug. 3, 2012).
Reid also released a statement Thursday night:
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. Id. (in update portion).
Now, folks, Romney has it backwards. It's not Reid who needs to "put up or shut up." It's Romney, as Robinson noted in the Washington Post article cited above. We have a strong journalistic tradition of believing that confidential sources of scandalous information should be protected. And we have a very strong presidential campaign tradition of tax return releases--started by Mitt's father George's release of 12 years of returns. Romney can make the speculation circulating around his refusal to release returns become a "tempest in a teapot" with a simple gesture--release the last ten years of his tax returns, as various Democratic reps on the Sunday talk shows noted in response on the Sunday talk shows. Aamer Madhani, Harry Reid's Accusations Fan Flames over Romney's Taxes, USA Today (Aug. 6, 2012). In fact, one commenter on the HuffPost story cited above notes that Romney called on Ted Kennedy to release back returns in the Senate race (which Kennedy did) with the language that "doing anything else would be taken as the Senator hiding something." (Just more proof of Romney's flipping nature...) and another commenter has the need for the returns exactly right:
Isn't it funny that if a person is being considered for a federal job she/he has a credit check run and in doing so the IRS is contacted to ensure there are no tax problems. Wouldn't it be prudent for the people of the United States to have the same prior to "hiring" someone to lead the country[?]
Aside: Huff Post also notes that Romney's founding of Bain Capital is tainted in a way that should matter deeply to U.S. voters, because he actively sought out investment from notorious oligarchic families that were funding death squads in El Salvador. See the extensive discussion (and cites to additional resources on this issue) in Ryan Grim & Cole Stangler, Mitt Romney Started Bain Capital With Money from Families Tied to Death Squads, Huff Post (August 8, 2012). Romney acknowledged that Bain had investors from El Salvador, but claimed that investigation showed no links to criminal activity, an assertion that is almost impossible to believe, since these families that admittedly funded Bain's startup were also notorious for supporting right-wing activism and reported in the media in 1981 as supporting death squads, prior to Bain's founding..
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