Romney Releases 2010 Tax Return     Permalink

After fumbling the ball on his tax returns for several weeks, Mitt Romney finally released one year of tax returns (2010) yesterday, far less than the gold standard set by his father, George Romney, who released 12 years' worth during his 1968 run for the White House. In 2010 Romney earned $21.7 million from profits, dividends and interest. He had no income from salary. In 2010 he paid about $3 million in federal tax, for an effective rate of 13.9%, far less than the top rate of 35% on salary income. No one is suggesting Romney did anything illegal, but many people will soon be suggesting that the tax laws should be changed so that people with very high incomes pay the top rate in the tax code. Expect President Obama to make this point in his State-of-the-Union speech tonight. In a year where the 99% vs. the 1% is becoming a big issue, the fairness of the tax laws is bound to become a major campaign theme and one that is certain to cause trouble for Romney. If he tries to pull a Buffett and says: "People like me should pay a higher rate than their secretaries" nobody will believe him. He has said that people earning under $200,000 should be exempt from capital gains taxes, but he has never suggested taxing capital gains as ordinary income for people earning over $200,000.

Romney's wealth is estimated to be about $220 million, give or take a few tens of millions. This means he got something like a 10% return on his investments (unless it turns out he is still getting profits from his time at Bain Capital). At a time when many people have had large losses in the stock market and interest rates are at a historic low, 10% looks pretty good. This could work for Romney by showing his business acumen but first people are going to want to know how he managed this feat.

After Romney became governor of Massachusetts in 2003, some of his assets were placed in a blind trust overseen by Boston lawyer and private equity specialist R. Bradford Malt. If Malt did a good job of minimizing taxes and this information leaks out, the issue of fairness is bound to come up again and again. The problem isn't that Romney or Malt broke any law--in all likelihood people that smart adhered precisely to the letter of the law--the problem is the law itself and whether it should favor the very rich at the expense of ordinary Americans. This is a debate that Obama would love and which must give Romney nightmares.

Role Reversal in the Debate: Romney Attacks, Gingrich Plays Defense     Permalink

After his stunning defeat in South Carolina, Mitt Romney decided his "ignore-your-pesky-opponents" strategy was not working and went on the offense at last night's debate in Tampa, Florida. He attacked Gingrich for his ethical shortcomings and pointed out that he was forced out of Congress in disgrace by his colleagues in the House. He used the word "disgrace" repeatedly.

Surprisingly, Gingrich didn't fight back so much. In fact, his usual theatricals were entirely missing. To some extent, his problem was that moderator Brian Williams instructed the audience in advance to be quiet and not applaud or boo or react at all, a request it honored. As anyone who has been involved in the theater knows, actors respond enormously to the audience. When the audience is reacting well, the actors are energized and do a much better job. Without any audience reaction, as in past debates, Gingrich fell flat. Although it has been said he is a good debater, in truth he is more of a good actor. As such, he requires input from the audience to perform well. That input was lacking last night and, as a consequence, he didn't turn in a stellar performance.

Recent polls have shown that Gingrich's South Carolina win has completely eliminated Romney's previously large lead in Florida. However, it is well known that the average voter has the memory of a flea and by next Tuesday, what happened in the debate not far from Fort Sumter Jan. 19, 2012 could be as distant as what happened at Fort Sumter on April 12, 1861. Gingrich seems to have already forgotten that what the Republican base likes about him is his fighting spirit. If he can't demonstrate that in Thursday's debate at the University of North Florida in Jacksonville, his surge could collapse for the third time in this campaign and Romney could win Florida and probably seal his nomination.

Fred Thompson Endorses Newt Gingrich     Permalink

Failed presidential candidate Fred Thompson has endorsed Newt Gingrich. As if anyone cares what he thinks. The only note about this announcement worth mentioning is that it caused the NY Daily News, generally a conservative voice, to dredge up a photo of Thompson that makes him look like a yellowish monster from outer space about to wreak havoc on the earth.

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