The recent claims by Harry Reid regarding Mitt Romney’s tax history is one of the strangest and dirtiest smear campaigns to have occurred in recent years. The claims by Reid make absolutely no sense on their face, and exhibit his complete disregard for truth or integrity. Using the simplest of logic, one determine the chances of these claims to be true to be incredibly remote.
Background: The claim by Reid is that “an investor in Romney’s former private equity firm told him the Republican presidential candidate paid no taxes for a decade.” (NY Daily News) Reid has not backed off this claim, despite not being able to site who the source of the claim is. He has toned it down a little in the days following the initial claim, saying “”He didn’t pay taxes for 10 years! Now, do I know that that’s true? Well, I’m not certain.” However, news outlets have picked it up and run with it as the likely truth, and have suggested that the burden is on Romney to prove it’s not true.
Democrats have been demanding that Romney release his tax returns back through the 1990s and Romney has not complied, only releasing a few recent years’. Releasing such a large number of returns has not been standard practice, but President Obama has released a significant number of his, so the argument is that Romney should follow suit. Tax returns have always been, however, private information, so it can’t be compelled. The IRS audits and tracks you, but the public doesn’t have an inherent right to know what you made and how you distributed the money as long as it was deemed legal by the IRS.
Of course, Romney has no urge to release his tax returns from his Bain days; the guy made a ton of money, and that is not a popular thing. Contrast that to Obama, who made a large but steady paycheck for a number of years and one can see where the political advantage would come. Straight forward and modestly large vs. complex and staggering in size. There could be an irregularity somewhere, but the likely news would be how much he made and the tax rate he paid (probably pretty low due to cap gains and charitable deductions, which are entirely legal).
In any case, Reid’s claim can be taken down pretty quickly:
Claim Source: First off, Reid won’t say who made this allegation. He has said, however, their qualification to know is that they invested in Bain funds in the ’90s. What the heck? This makes absolutely no sense. Millions of Americans make investments in funds… does that mean they know the personal taxes of the manager? Of course not. An investor would have no idea what Romney paid in taxes, even at a PE firm. That’s all private information. The only person outside Romney’s family, his accountant, and the IRS who would know anything about Romney’s taxes would possibly be an accountant at Bain… and then they’d only know what the company withheld, which is likely nothing (Romney’s accountant would do the withholding after the disbursement). The claim source is completely unqualified, if they even exist (I suspect Reid just made them up).
Feasibility: Romney was one of the most prominent businessmen of the 1990s, who had aspirations also for government roles. How the heck could such a person just skip their taxes for ten years? They couldn’t. Based on Romney’s income, it is likely that the IRS kept continual tabs on him / audited him regularly. Do you think that the IRS would be cool with you skipping taxes for a few years? The only way you could pull it off is if you are “off the grid” and “fly under their radar.” Do you think that the IRS would just forget about one of the most prominent individuals in the US? This is insane. A normal citizen might be able to make it 5 years or so without getting nailed, but Romney would have been in jail by year two. Seems like a great plan for someone with political aspirations. It’s such an outlandish claim that it’s astounding that the media wants to believe it.
Legal Implications: Let’s say that somehow this impossible situation is true. Also, let’s say that Harry Reid got this information from an actual source like the IRS. In that case, Reid would be revealing personal tax information without consent… a felony. Per IRC 6103, Senator Reid would face up to 5 years in prison if he believed the information he was disclosing to be true. Any of his advisers (and Reid himself) should know that to be the case. It is for this reason that I believe he is simply making this information up.
Bottom line is that the Senate Majority Leader is knowingly stating falsehoods on the Senate floor, and counting on a complicit or incompetent media to smear a political opponent based on that information. The Obama campaign recently went out of their way to accuse Romney of being a felon based on SEC statements – a claim which holds no water – and has been using the word “felon” in the background of attack ads on Romney, but that was at least campaign personnel. Just after that new bar for slime was set, we have established another.