USNews Thomas Jefferson Street Blog 7/16/2012

Mitt Romney’s Tax Problem

July 16, 2012 RSS Feed Print

(Charles Dharapak/AP)

Mitt Romney wanted to have his cake and eat it, too. He wanted to make himself fabulously rich, be the captain of the financial universe, and become senator, governor and, now, president.

He wanted to do it all, without making public his financial dealings, his tax returns, his web of foreign tax shelters. That was his business, not the public’s. He should have chosen one path or the other—in his case, they don’t mix.

Mitt Romney was too cute by half.  He was guaranteed payouts at Bain no matter how many bankruptcies, lost jobs, destroyedpensions. He thought parking money in off-shore Bermuda corporations, Swiss and Cayman accounts, and using fancy accounting gimmicks to create tax avoidance schemes could be either kept secret or explained away.

Now Republicans are calling for him to come clean, to release his tax returns, to untangle the web of financial dealings. But he can’t because he was up to his eyeballs in Bain when he said he wasn’t, as he continues to reap huge amounts of money from his years there.

So why all this back and forth on whether he “retired” from Bain in 1999? Simple. Ted Kennedy caught him in the Senate race in 1994 by exposing Bain and what it did to workers and companies.

When Romney saw a big opening with the takeover of the Olympics in February of 1999, he grabbed it and by 2001 he knew he had a shot at being governor of Massachusetts and maybe a great deal more.

But he also knew that Bain was a liability in another race in Massachusetts and decided that his “leave of absence” better become a “retirement.” After all, he was disengaged from the day-to-day operation of the company, even though reaping a six figure salary as an officer and many millions more because of his association as “president, CEO and sole stockholder.”

The last thing Mitt Romney wanted to do as he was planning his political future was have that Bain albatross around his neck again—no, the Olympics was his ticket.

[Read the U.S. News Debate: Is Mitt Romney Blowing It Against Barack Obama?]

But, now he has this very big problem—he can’t release his incometaxes back 12 years as his father, George Romney, did when he ran for president. He can’t provide 23 years of tax returns as he did to the McCain campaign when he was angling for vice president and being vetted.

Tax returns will show his continued financial windfall from Bain and it will show all his off-shore shenanigans. And it will show that this is someone who was not paying his fair share of taxes according to almost anyone’s definition. That is my guess.

When Kevin Madden, his spokesman, read a statement that Romney did not put his money in foreign bank accounts and trusts to avoid taxes he was not asked the very simple question: Why did he do it, if not to avoid taxes? What was the reason for all these off-shore accounts? What was he trying to hide?

And now, Romney is in real trouble. If he is transparent about his financial dealings and taxes, he knows it would be devastating to his campaign. If he tries to stonewall, he has three and a half months of a long campaign, not three and a half weeks. That is a long time to keep trying to change the subject.

So the question for Romney is: Can he have his cake and eat it, too? Can he simply deny further requests for information and hope he can keep it secret?

While he is telling the middle class to “eat cake,” maybe he has to be careful he won’t be eating crow.