Romney’s tax returns—just the break the Obama camp was waiting for?

Politics & Elections
1

The Washington Post is reporting that Mitt Romney will be (purportedly) releasing his tax returns in April. They are also reporting that he said he “pays an effective federal tax rate of about 15 percent.” (link).

I think this is the strongest/best news the Obama camp could have hoped for.

It is extraordinarily unlikely that Romney is understating his tax rate. It would make him look bafflingly out of touch with his personal finance. This is the sort of thing a Palin could get away with (not that she would make a similar statement, but her milieu is more accepting of the folksy gosh-darnnit I just pay what my accountant tells me to pay), but would appear damagingly out of character for Romney.

If there is more than a couple percent shift, it’s likely that it is below 15 percent. Per above (i.e. his level of financial savvy and personal organization), and particularly because the issue has been in the air for some time (and if not raised by opponents it would have been raised by is staff as a potential issue), it’s likely that he already knows exact figures. So the mild equivocating and stalling (“about” 15 percent; I’ll tell you exactly after the primary is locked up) suggest that the actual numbers could be damaging. That’s not certain, of course, but he has a greater incentive to hint they’re as high as possible.

Assuming it is 15 percent, it will have the historic appearance of being tailor-made for the current inequality zeitgeist. It is the opposite of Santorum heading into Iowa just as it was his turn to be the anti-Romney. Even the standard Republican line of job-creator has taken a massive hit by political infighting. Following the Buffet Secretary letter, the Occupy movement, and even the relatively weak economy, a 15 percent tax rate will cast him as the political opposite of Reagan’s ‘welfare queen’.

There’s his choice to all but declare rates to be 15 percent now but actually release them in April. Reneging on the promise will be costly by handing the Democrats a What-Is-He-Hiding commercial. Through the timing of the eventual release he’s ensuring that it will be a news-cycle event, not just an issue raised by the Obama campaign. That means it will have come up twice, keeping it alive longer than necessary. And it will be coming up in the midst of the general. He has a it’s-mine-to-lose-it lock on the primary; weathering the same storm twice and during the general seems to have no gain and all risk.

There are other reasons, but the last one I’m mentioning is potentially the most damaging to his electoral aspirations. April. Spring. Occupy. There’s no sign that the Occupy movement is fading into yesterday’s news, and lots of reasons to think that as spring arrives (and school ends) it will reach another peak. Even if the protestors (not just students) do not rejoin the ‘occupy’ part of Occupy, they will still be charged with its underlying themes—themes that are particularly unfriendly to an astronomically wealthy candidate who paid less taxes then they did. And all this is happening as the climate gets warmer, when putting activists in the field is easier. Romney already faces an enthusiasm gap within his own party; this will both hurt that and bolster the passions of the anti-Romney/pro-Obama side of the equation.

Aside from a hastily written OP, is there some political strategy I missed? Or is obvious OP obvious?

2

It’s certainly a political boon to Obama, although if we look at it objectively, it shouldn’t be. Romney pays the tax he owes, like most people. He doesn’t pay more than he has to. I’m wondering if Kerry had a problem any different from that, or do he and his wife file separately, allowing him to mask it? Politics being all about perception, this is NOT good for Romney. Not sure why it’s much of a surprise though…

Perhaps just a damning, though, is when he talked about this he said he makes some regular income from speaking fees, but said it “wasn’t much”. He was certainly thinking that it “wasn’t much [relative to his investment income and so doesn’t affect his effective tax rate much]”, but most people would think that the several hundred thousands of dollars he makes in speaker’s fees is quite a bit, thank-you-very-much!

3

Well, there’s no question that both Obama and Romney’s GOP opponents want to paint Romney as “out of touch” with the average American. Romney hasn’t helped his own case with multiple gaffes that make John “I don’t know how many houses I own” McCain seem like a tactical genius in that regard. So obviously pointing to a “low” tax rate will play into it.

Another suggestion I’ve been hearing for Romney’s lack of enthusiasm in releasing his returns is millions of dollars in donations to the Mormon church. Noticing huge donations may bring up the religious issue that Romney has so far been successful in downplaying.

4

It won’t do anything to dispel the notion that Romney is an out-of-touch rich guy. I guess his campaign figures that if he releases the full returns in April, it won’t hurt him in the primaries and it’ll be forgotten by the time the general election rolls around. I’m not sure what’s to be gained by giving people the gist of it now and then more later, but I suppose he’s trying to prevent Gingrich and Santorum from asking what he’s hiding.

5

Hey, when you make $50,000,000/year and you have to tithe, what’s a fella to do? It’s just math, dude!

There’s also the inevitable “boxers or briefs” question, with a Mormon twist just waiting in the wings.

6

Why shouldn’t it be? It’s not as if people are decrying his use of obscure or grey-area tax breaks to pay less. It’s that there is legitimate (if arguable) reasons to object to non-labour income being taxed at relatively low rates, objections to how private equity profits are taxed, and objections to a tax code that helps perpetuate and exacerbate income inequalities.

7

+1. I was wondering why Romney was so resistant about releasing his tax returns, but I think this is the answer. 15% sounds about right, since most of his income is from investments. Obama’s 2010 rate, btw, was 28%.

The other interesting thing was that Romney said he made a trifling amount, $370,000 or so, from speaking tours. That is enough to put him in the 1% according to the article I saw.

I also agree with you about OWS. I suspect they allowed themselves to get kicked out of their encampments before the snows came. They’ll be back in April. They have already made income inequality the hot topic, and with some more on this Romney is going to have a hard time explaining simply why it is okay for him to pay less than Joe Average Voter. It also makes his opposition to raising taxes on the rich look very self serving.

ETA: This is in response to the OP - I take too long to type. But +1 to Rhythmdvl too.

8

His position on the issue should be an issue, but as it is, he’s just paying what he owes, like all of us. He is, in fact, in favor of even lower rates on dividends and such, but only for people who make much less than he does.

9

While I agree, in principle… most people don’t have as much influence over tax rates as Romney would if he were to be elected President. This just feeds into the OWS crowd’s beef that the rich get to write the laws that enable them to get richer, at everyone else’s expense.

10

Although everybody already knew he was very rich. Since he’s pretty much a shoo-in I think he might as well have released the whole thing now: the other Republican candidates can’t really attack him on this issue anyway. Gingrich tried to bash him for being a venture capitalist and he almost got tarred and feathered. And maybe I’m overthinking this but maybe releasing his own returns around the time most voters are filling out their tax forms - reminding them they’re making less money and paying a higher tax rate - might not be a great strategy.

11

Sure, Romney has made his share of gaffes, but he’s playing the tax card dealt to him as best he can. Releasing them now would be foolish, why give your primary opponents any ammunition? Better to call the “victory” play, take a snap, and take a knee.

Once his opponents drop out and endorse him, then he should release ASAP. The sooner this gets off the news cycles, the better for him. If it turns out he paid <15%, then like Lucy, he’s got some splainin’ to do. Still, I don’t see this as having a huge effect on the race, those who don’t see a damn thing wrong with the wealthy paying so little taxes are already voting Republican. Those who will be outraged are already voting Democratic. It’s the Reagan Democrats that he could potentially lose here, it will make his election more difficult but not impossible.

12

The feeling that the rich should be paying more in taxes cuts across party lines, and that’s when you address marginal rates. The fact that some very rich pay a lower tax rate than working stiffs can get plenty of Republicans riles up, not to mention the independents-- you know, the ones who will probably decide this election.

I agree he needs to time this right. Now would be wrong. Between now and April will be wrong. Sometime well after April, but well before November would be the way to go. Juy, maybe, or during the slow news month of August.

13

I don’t think it riles many Republicans at all. If Limbaugh tells the Republican base that they should be outraged at any talk of higher taxes for the rich, then outraged they will be. It will make it much more difficult for him to win independents, but if it comes out early he could find a way to win back whatever he loses.

14

I don’t agree - I think many Republicans find tax sheltering unseemly and want to close tax loopholes. The fact that Romney seems to be using the carried interest provisions to treat what most would consider income (including the WSJ editorial page) as investment income is a potential problem for him.

There is a reason Gingrich et al are pushing this right now and it’s not because they think it will hurt Romney with Democrats or independents.

Also the idea that the entirety of the GOP gets its orders from Rush is laughable - if that were the case Romney wouldn’t even be a factor much less the inevitable nominee. Even the most popular talk show hosts reach only a fraction of the electorate. It’s a bad idea to conflate Limbaugh listeners with the GOP as a whole.

15

One thing I’m looking forward to in the general election is watching evangelicals kneel down and lick the boots of a Mormon. The other is watching rural middle-class voters happily swallow the line “Yeah, it’s true people like me have a tax rate that is 10 percentage points lower than yours. But don’t you think it should really be 15 points lower, because of the creating jobs and stuff?”

16

Is he? Don’t you have to be an active hedge fund manager to do that? I think most of his income is plain ol’ dividends.

Considering he endorsed Rick Perry, I think that pretty much shows how silly that is.

17

There’s also the question “15 percent of what?” If he’s paying about 15 percent on a taxable income that is depressed far below his actual income by means that don’t pass the smell test (or, worse, means that don’t pass the giggle test), he’ll look like a total weasel (well, more like a total weasel than he does already).

18

I suspect that the average Republican thinks that the rich are paying in the 35% range, and that increases will push it above that. Lots of visitors to this board are confused about marginal rates, and the given word is about how much taxes the rich pay, the poor dears. That Romney is paying 15% will show what a crock this is. Further, the average voter is going to have a hard time accepting that raising his low tax rate somewhere near theirs is going to destroy his incentive to work. (And please, not rich, “job creators.”)

As for timing, now is probably the best time since lots of Republican activists are still going to have trouble being mad at a guy paying too little in taxes. Then by the summer it will be forgotten. Waiting until then is going to make the story fester - Day 100 of Romney’s Tax Return Held Hostage. That never works.

19

Yea, I don’t understand the point of teasing the media with them until April. Either declare that your not going to release them and stick to it or release them now and get it over with. Dangling the possibility of releasing them later just gets the press more fixated on them.

And Romney’s GOP opponents tax plans are even more regressive then his. They aren’t really going to get much traction attacking him this way.

What’s Newt going to say, that its unfair Romney pays so little taxes, and so when Newt goes to Washington he’s going to make sure Romney pays even less?

20

If the Obama administration doesn’t rebrand this as the “Romney loophole” or the “Romney tax rate” then they have learned nothing from the Republicans.