Thou shalt release thy tax returns
I must admit that I am somewhat torn by the current debate over whether or not Mitt Romney should release more tax returns. I have listened to arguments on all sides, and I feel somewhat divided on the issue. The one conclusion that I have drawn, however, is that many of the politicians calling for the release of his tax returns are quite hypocritical.
The argument that the opposition is putting forth is that anyone who runs for the office of president should be transparent. In addition, they claim that it is tradition for presidential candidates to release many years. Many top Democratic officials have gone so far as to imply that Romney will not release his returns because he is hiding something nefarious. Some have not gone quite that far but are willing to speculate that there are years when Romney did not pay any taxes or that he is avoiding paying taxes by “hiding” his money in offshore accounts. It is all speculation of course, laced with the worst kinds of innuendo designed to discredit and paint the Republican candidate in a negative light.
One example of this practice is in a statement by Obama’s campaign manager, ” ‘The President and the Vice President released their tax returns today so that Americans can review their personal finances, understand how they earn their income and ensure there are no conflicts with the interests of the nation…But on the eve of April 17th, Governor Romney has yet to provide tax returns from the period in which he made hundreds of millions as a corporate buyout specialist, or as governor of Massachusetts, the experience he says qualifies him to be president’ “(3). Senator Reid gave a speech to the Senate in which he asked, “ ‘We’d like to know what’s in those tax returns that he refuses to show to the American public. Did he pay any taxes?’ ” He has even gone so far as to suggest that “Romney’s refusal to release more than two years of tax returns would make him ineligible to serve even as dogcatcher” (9). Another example of the innuendo is when “Rep. Debbie Wasserman Schultz of Florida, the chairwoman of the Democratic National Committee,…harangued Romney for refusing to release more tax returns, calling it a ‘penchant for secrecy‘ ” (9).
On the other hand, Romney supporters argue that this issue is just a way for Democrats to distract the voters from the real issues at hand such as the economy and President Obama’s poor record in office. According to John D. McKinnon, “Democrats see a way to deflect voter dissatisfaction over the weak economy and diminish the GOP’s advantage on tax issues by attacking what they describe as tax breaks that have unfairly benefited wealthy people and big corporations and drawn jobs and investment away from the U.S.” (5). Supporters also claim that even if Romney did release more returns, it would not be enough to silence the opposition, and the returns would become a tool that the Obama campaign would use to manipulate Romney’s image as a fat cat who only cares about the wealthy. The tax code is so complicated that even if the public did review Romney’s returns, it might not understand many items such as investment dividends, which would make it very easy for the opposition to distort. ” ‘In the political environment that exists today, the opposition research of the Obama campaign is looking for anything they can use to distract from the failure of the president to reignite our economy,’ Romney told Costa. ‘And I’m simply not enthusiastic about giving them hundreds or thousands of more pages to pick through, distort and lie about’ ” (6). An article in The Washington Post states, “Florida GOP Chairman Lenny Curry said that by calling for the tax returns, Obama “wants people to be jealous of and resent wealth” and that the president “is without question wanting a street fight in this campaign.” (7)
As always, I try not to be swayed by the media or political talking heads. I want to form my own opinions on issues, and part of that requires that I educate myself as much as I can. So, the first question I asked myself is what value there is in reviewing Romney’s tax returns. I wonder how many people would actually take the time to read through the tax returns themselves and how many would rely on political analysts and strategists to do it for them. There are two problems I see here. First of all, as I have already pointed out, tax returns can be very complicated and difficult to understand. Most people don’t even want to look at their own tax returns, and many who have itemized deductions and other complicated financial issues hire a professional to do the work. So would the average American glean much from Romney’s tax return? The second issue is that if voters rely on others to interpret the information for them, then it will likely be biased. It is easy to manipulate numbers, omit certain information, and misrepresent other information to support a point.
In order to see how I would interpret such information, I reviewed all of Obama’s returns and the two for Romney. To be honest, I did not have the patience of will to understand what was in half of them. The two things I did pay attention to were the adjusted gross income and gifts that each gave to charity. (I have listed both below.) I was not sure what it meant when I saw foreign income listed on Obama’s return, nor did I understand what the $24,000 gifts the Obama’s gave to their daughters was. Romney’s return has sections that went completely over my head.
The conclusions I drew are simple.
- I really have no idea exactly how they made their money. I do understand some of the employment, but once it goes into investments- capital gains and losses- etc, I am lost.
- I do not have the patience or will to determine what tax rate they paid.
- Seeing the returns has not influenced me in favor of one or the other one bit, although I must admit that I am somewhat impressed by how well Romney seems to have chosen his investments and done for himself.
- Both men are far richer than I have ever been and probably ever will be. Neither can empathize with MY financial life or know what I truly need and want nor should he need to.
- I would expect any individual who runs for the office of president to have acquired some wealth. I would want that because if he (or she) has been successful in his (or her) financial life, then that individual should be able to transfer the knowledge and skills to handling the economy.
- Both men are far richer than I have ever been and probably ever will be.
2000 AGI $240,505 Gift $2,350
2001 AGI $272,759 Gift $1,470
2002 AGI $259,394 Gift $1,050
2003 AGI $238,327 Gift $3,400
2004 AGI $207,647 Gift $2,500
2005 AGI $1,655,106 Gift $77,315
2006 AGI $983,826 Gift $60,307
2007 AGI $4,139,965 Gift $240,370
2008 AGI $2,656,902 Gift $172,050
2009 AGI $5,505,409 Gift $329,100
2010 AGI $1,728,096 *822,322 foreign income Gift $245,075 *$24,000 to daughters
2011 AGI $789,674 *269,710 foreign income Gift $172,130 *24,000 to daughters
*2,768,000 treasury bills redeemed
2010 AGI $21,646,507 Gift $2,984,974
2011 AGI $20,901, 075 Gift $4,020,572
Personally, I find very little value in reading someone’s tax returns. It does not speak to me about the individual’s character or values. It does not show me his philosophical views or how well he will lead the country. It is just a matter of numbers on paper that mean nothing.
Another question I have to ask myself is if Romney is hiding something potentially damaging. I have a difficult time arguing against this because I have often felt that if someone refuses to share information, it is because it is something that is not in their best interest so to speak. Nevertheless, that is speculation of the worst kind and makes me no better than those who use this issue to debase an opponent without actual evidence. The logical side of me has to weigh other factors. First, Romney did give the 2008 McCain campaign 23 years of returns when he was considered as a running mate.(3) If the McCain campaign had found something, I am fairly certain it would have surfaced by now. In addition, if there were something illegal in those returns, the IRS should have caught it and acted. That’s what the IRS is for, right? And if government organizations are efficient and effective, then they should be able to follow through.
So what about the idea of tradition? Should Romney release his returns because it is what presidential candidates have done in the past? The Tax History Project is a website that lists past presidents, recent candidates, and their tax returns. Upon review, I found that the number of returns varies from 1 to 13. Jimmy Carter and George Bush only released 3 years while Biden has released 13. In some cases, the candidate only released a partial return or summary data. So I guess there is no firm tradition.
Finally, I have to ask myself what kind of backlash Romney could face if he did release more returns (that being one of his campaign’s main arguments). I tried to research past campaigns to find out how big of an issue this has been before. One interesting thing I found was that “Republican candidate John McCain released two years of tax returns for the years of 2006 and 2007 in April 2008, less than a month after Mr. Obama. The Obama campaign was not satisfied because the candidate, who is one of the wealthiest members of Congress due to his wife’s income, did not release his wife’s tax returns” (10). This is an age-old argument that can be traced all the way back to 1980 when Reagan ran against Carter. It has been a relentless form of attack where either the candidate or his spouse faced enormous pressure. Sometimes some potentially embarrassing things were revealed. Ironically, these did not affect the election of the candidate to office. For example, “According to a separate Associated Press report, Reagan experienced “one of the most embarrassing incidents of his career” after his 1970 tax returns were released to the press. The reason? The millionaire former actor and governor, worth up to $4 million, paid no state taxes because of business losses and tax shelters” (10).
All of the research and reading I did lead me to another issue that I have not considered before. If the president should be transparent, shouldn’t all high-level politicians, including members of Congress who write and potentially benefit from the laws they pass? This is where I see the hypocrisy seeping in on this issue. It seems that in Washington there is a double standard, especially when it comes to a critical election year. Some of the following quotes support this:
“Like Romney, many members of Congress are far wealthier than the average American. And like the president of the United States, those congressmen stand to benefit from the tax policies they shape. Currently, the law only requires members of Congress to report their wealth and liabilities in broad ranges. Asked why the rules should be different for members of Congress, she [Nancy Pelosi] said, ‘When I run for president of the United States, you can hold me to that standard’ ” (8).
“The widespread secrecy in one branch of the government suggests a self-imposed double standard. Yet while American politics has come to expect candidates for the presidency to release their tax returns, the president isn’t alone in having a say over the nation’s tax laws. Congress also stands to gain or lose by the very tax policies it enacts, and tax records – more than any broad financial disclosure rules now in place – offer the chance to see whether the leaders of the government stand to benefit from their own actions” (9).
“All three [Pelosi, Reid, and Wasserman Schultz] refused repeated requests from McClatchy to release their own returns, requests that started before the flap over Romney’s records” (9).
I do wish that Romney would release his tax returns. Mainly I wish this because I am tired of hearing about it and would like to get back to the real issues. The other side of me applauds Romney for not caving to the pressure and ridiculous innuendo the other side is throwing to the media. I am sure the returns will surface at some point, but I hope it is on Romney’s terms.
(1) President Obama and Vice President Biden: 12 Years of Tax Returns
(2) Tax history Project: Presidential Tax Returns
(3) Obama releases 2011 tax returns as campaign attacks Romney
(4) Obama, Like Buffett, Had Lower Tax Rate Than His Secretary
(5) Ann Romney: No More Tax Returns
(6) Romney: Releasing past tax returns would give Obama more to ‘distort and lie about’
(7) Romney, under pressure to release tax returns, turns fire on Obama
(8) Few in Congress have released tax returns, report shows
(9) Most members of Congress keep their tax returns secret
(10) Outrage over tax returns a replay of past campaigns
The 3 Reasons Why Romney Won’t Release Those Tax Returns
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Republicans Step Up Calls for Romney to Release More Tax Returns
Romney’s Tax Returns Are Only the Beginning
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What’s Romney Hiding in His Tax Returns?
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Gov. Romney: Just Release the Tax Returns