Mitt Romney gave $100 million to his kids without paying gift taxes

Ann Romney introduces her husband, Republican presidential candidate Mitt Romney, at a campaign rally in Las Vegas February 1, 2012. The Nevada caucuses take place on February 4. REUTERS/Rick Wilking (UNITED STATES – Tags: POLITICS ELECTIONS)

It’s all perfectly legal, but now we have another reason why Mitt Romney fought like crazy to avoid disclosing his tax returns.

Read the article from Reuters for all the gory details. All of this is tied to the “carried interest” exemption that is basically a gift to private equity managers on Wall Street.

Romney will get hammered for this and his overall tax rate in the campaign, and it’s a legitimate issue as Romney is arguing that taxes for the wealthy should be even lower.

Oh, and this is the same guy who just said he’s “not concerned about the very poor.” And yes, his tax plan calls for increasing taxes on the working poor.

I was planning a post on how the GOP deserved Newt Gingrich, as his nomination would be the culmination of a generation of Republican politicians who practiced the worst form of divisive politics. An Obama landslide over Newt would be the perfect ending to that story.

But Romney might be even better. He’s the poster child for the ridiculous conservative argument that all our problems will be solved by lowering taxes on rich people. Romney, in his attempt to hide his liberal past, has embraced right-wing dogma on practically every issue, including taxes. Now, the public will see exactly what today’s conservatives stand for, and they’ll have a walking and talking embodiment of the type of people who benefit from these policies.

I don’t suspect they’ll like what they see. This election will likely be very difficult for Obama if Romney is the nominee, but the more I see of him, the more he looks like a Mike Dukakis in terms of political skills. Romney has real vulnerabilities in states like Ohio where he supported the anti-union law that got repealed by over 60% in a referendum. If Romney loses Ohio it’s likely he can’t win.

  

Tax issue is sinking Mitt Romney

Mitt Romney has had a bad week, and his “maybe” answer regarding his willingness to release tax returns for prior years like his father did many years ago will likely go down as one of those iconic campaign moments that help define a candidate.

It was obvious to me for the past month that this would be a real issue. The tax code has been manipulated for years by lobbyists, and wealthy financiers like Romney get huge breaks, including the indefensible carried interest.

Romney is particularly vulnerable on this issue as he’s proposing to lower tax rates on the wealthy even more. Now he has compounded the problem with his muddled answers.

The ad above was created quickly after his disastrous debate performance. Right now the polls suggest he’ll lose the South Carolina primary to Newt Gingrich.

  

Mitt Romney’s tax return problem

Ann Romney (L) introduces her husband, Republican presidential candidate and former Massachusetts Governor Mitt Romney, at a campaign stop in Bethlehem, New Hampshire December 22, 2011. REUTERS/Brian Snyder (UNITED STATES – Tags: POLITICS)

The folks at BusinessInsider.com point out that Mitt Romney’s biggest problem might be his tax returns. So far he has refused to release his tax returns and he reiterated that position in a recent interview with Chuck Todd.

Romney’s campaign team has clearly decided that the political risk of releasing the returns outweighs the potential problems of not doing so. No one knows for sure what the documents would say, but by the candidate’s own admission, the bulk of Romney’s retirement income from Bain has been from capital gains, which are subject to 15% tax rate.

That means that for the past 10 years, Romney has likely been paying a lower tax rate than most middle class voters. If this is the case, that information could be devastating to Romney’s presidential bid.

The issue of tax fairness is huge right now, and Romney might become the poster-child for that problem. Warren Buffet has famously come out strong on this, saying that it’s not fair that he pays a lower effective tax rate on his income than his secretary.

I think this is a huge problem for Romney. If he makes it to the general election, the Obama campaign and the Democratic PACs are going to hammer him on not releasing his tax returns. If that issue catches fire and he ultimately releases them, then the story is huge.

But it’s huge regardless of when he releases them. He might want to just get it out of the way and have a response ready.

Either way this one can be problematic.

  

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