US Analysis: Why The Tax Returns May Sink the Romney Campaign

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On Wednesday night, former President Bill Clinton was interviewed on the BBC. He declined the opportunity to attack Republican Presidential candidate Mitt Romney over his refusal to release his tax records. Instead, Clinton based his support for Barack Obama on the President's record and an economic plan --- unlike Romney's, he claimed --- that would build a “broad-based prosperity” in the United States.

Unfortunately for Romney, Clinton is one of the few commentators who have sidestepped questions regarding the GOP candidate's finances. “What is Mitt Hiding?” is dominating the media, with many of the calls for the tax returns coming from steadfast allies.

Of course, the most critical attacks are from liberal outlets. Slate and The Huffington Post are among the organisations speculating that Romney will not release his records because they will show he participated in a 2009 IRS amnesty for individuals avoiding taxes by hiding their income in Swiss bank accounts. MoveOn has released a video asking if Romney hid a crime in his tax returns, related to his supposed retirement from Bain Capital in 1999 to run the Salt Lake City Winter Olympics. Another claim is that in 2009, in the wake of the financial crisis, Romney used accounting tricks to avoid paying any income taxes.

But these insinuations are not as damaging as the requests by Republicans that Romney end this death by a thousand cuts and release the records. Truthout has compiled a list of 18 prominent Republican politicians and conservative pundits who have asked Romney to take the short-term damage, avoiding the longer-term perception he is hiding something that will ruin his campaign.

It is that word "perception" that matter, as The National Review succinctly noted in its editorial calling for a release of the returns:

Romney may feel impatience with requirements that the political culture imposes on a presidential candidate that he feels are pointless (and inconvenient). But he’s a politician running for the highest office in the land, and his current posture is probably unsustainable. In all likelihood, he won’t be able to maintain a position that looks secretive and is a departure from campaign conventions. The only question is whether he releases more returns now, or later — after playing more defense on the issue and sustaining more hits. There will surely be a press feeding frenzy over new returns, but better to weather it in the middle of July.

The editors of The Washington Post joined the debate on Wednesday: "[It] is insulting to voters for Mr. Romney to keep them under wraps and will only fuel suspicions that he has something else to conceal.”

Romney's response to the continual demands for disclosure are building the narrative that he is incompetent and untrustworthy. Brent Budowsky, a liberal pundit for The Hill, has been all over the issue since December. In January, when Romney was still refusing to release any records as part of his nominating process, he wrote:

There is no question that President Obama and his campaign machine will use Romney's business dealings, especially layoffs that were imposed by his deals, as a major campaign issue. When Romney ran against the late Sen. Edward Kennedy (D-Mass.), Kennedy used this information to devastating effect. In the general-election campaign of 2012, Obama would certainly push hard for release of the Romney tax returns. If there is politically harmful information in those returns, the result could be devastating in the fall campaign.

Budowsky also argued, in what has almost become a prophesy:

Mitt Romney is very vulnerable to being attacked as a job destroyer. Keeping his tax returns secret is a losing political issue. What is so threatening to Romney that he insists on keeping them under wraps?

The Romney campaign has had plenty of advance warning that his tax records, and his history at Bain Capital, would be used by Democrats to attack him. Their response has been nothing less than incompetent. At no point since the media picked up this issue in January has Romney been anything other than on the defensive about his financial history.

And that leads to the question: why did Romney not sort this issue out after his Presidential bid in 2008 when he knew he would be running for the nomination in 2012?

There may be perfectly valid reasons of personal conscience that are dissuading Mitt Romney from releasing further records. For fundamentalist Christians, following the stricture of Matthew 6:1-4, charitable giving is only a Christian act when it is anonymous: “But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. Then your Father, who sees what is done in secret, will reward you.” I don't know if there is a similar religious motive for Romney, as a Mormon; however, even if there is, it still leads to the worrisome conclusion that he has the hubris to believe that his personal credentials or ambition to be President are more important than the impresison --- as The Washington Post argues --- that he is “insulting” voters by not releasing his records.

Tax returns are not a sudden distraction for Mitt Romney. In 2002, his successful run to become Governor of Massachusetts was nearly ended by concerns that by receiving a discount on State property taxes while living in Utah. And as early as April 1994, The Boston Globe reported: "With the tax-filing deadline looming, Republican Senate candidate Mitt Romney yesterday challenged Sen. Edward M. Kennedy to disclose his state and federal taxes to prove he has ’nothing to hide’."

Sen. Kennedy refused, and still won, so perhaps Romney has taken that example as a lesson that he can survive his current battering. If so, he has forgotten a general rule of presidential elections: a negative, growing perception about a candidate on one issue will colour voters' reactions to that candidate on others.

Ask the John Kerry campaign from 2004. That year Democrats believed that, with a stalling economy, and opinion divided over the war in Iraq, the Massachusetts Senator had a decent chance of beating President Bush. But the Bush campaign, despite their own candidate's inconsistency on certain policies, were able to build a narrative that John Kerry was a flip-flopper on vital issues --- including the Iraq War –-- establishing him as a politician who changed his principles according to the political winds.

p>This all built the impression that President Bush was, by comparison, a "strong leader" and "resolute" in his beliefs. Democrats complained that Kerry as a man who changed his mind was a caricature promoted by the media, but polls in September 2004 showed voters has decided, "Despite Bush Flip-Flops, Kerry Gets the Label".

Exit polls after the election showed that voters who cited "honest and trustworthy", a "strong leader", or a "clear stance on issues" as their primary reason for a decision heavily backed President Bush. As a "strong leader", Bush triumphed by a margin of 87-12, and on a "clear stance on issues", he won by the still emphatic split of 79-20.

Sadly for Mitt Romney, any valid reasons for not releasing his tax records have now been overwhelmed by the perception of his campaign's inept response. In the business world where he made his fortune, his insistence on the privacy of confidential documents might be a virtue, but in an election for the President of the United States, it has become the vice that may sink him. Even if he does release the records, and even if there is nothing shocking in them, the perception will remain that he has a different idea of the American Dream that he wishes to protect than most of the people he hopes to represent.