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A rocky day for Romney as money questions persist

By Kasie Hunt
Associated Press / January 19, 2012
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CHARLESTON, S.C.—Facing newly barbed questions about his wealth, Mitt Romney on Thursday refused to bow to pressure to immediately release his tax returns in the rocky home stretch of South Carolina's Republican primary. Though still the front-runner for the nomination, Romney also lost his claim to an Iowa victory just as Newt Gingrich emerged as a stronger threat.

"If I'm the nominee, I'll put these out at one time," Romney said of his tax returns in a Republican presidential debate Thursday night.

Gingrich pressed Romney to release his tax returns ahead of the South Carolina primary Saturday. "If there's anything that's in there that's going to help us lose the election, we should know before the election," he said. Gingrich released his own tax returns Thursday night, showing he made over $3.1 million in 2010 and paid $994,708 in taxes.

Romney barely mentioned the tax returns in campaign events here as he has been dogged by questions about his personal wealth, a few generated by sometimes-awkward comments he's made over the past 10 days.

In the debate Thursday, Romney said arguments between two of his rivals were "in my view a perfect example of why we need to send to Washington someone who had not lived in Washington, but someone who has lived in the real streets of America." Romney has three homes, in California, Massachusetts and New Hampshire.

Romney grew up the son of Michigan governor and car company president George Romney, who released 12 years' worth of tax returns during his 1968 campaign for president. When asked during the debate if he planned to follow his father's example or if he would release fewer years, Romney said: "Maybe."

The former Massachusetts governor has reluctantly agreed to release the tax returns but has spurned calls from his rivals and even allies -- including key supporter New Jersey Gov. Chris Christie -- to do so immediately. Romney also has not yet explained why he keeps part of his fortune in the Cayman Islands. His campaign says he does not receive a tax break on the money there.

The silence from Romney's campaign on details of his holdings was just one element of a political day that underscored the unpredictability of Saturday's South Carolina primary.

In a blow to Romney, Texas Gov. Rick Perry dropped out of the race and endorsed Gingrich, a move that could start to consolidate conservative support behind the former House speaker.

That shrunk the field, leaving Romney and Gingrich on stage Thursday night with just Texas Rep. Ron Paul and former Pennsylvania Sen. Rick Santorum. Santorum claimed an Iowa win during the day -- the state party said he did have the biggest share of the votes it could count -- and he continued to fight Gingrich for the mantle of Romney's chief conservative foe.

Romney barely mentioned Perry at all, leaving him out of a speech to supporters and only mentioning him in passing when pressed by reporters afterward.

"Terrific guy, terrific conservative," Romney said. "We're going to miss him on stage tonight."

But Romney also was grappling with the announcement from the Iowa GOP that Santorum actually led him by 34 votes in the final tally of the state's caucuses, though no winner has been declared. At the very least, it was a symbolic setback for a Romney campaign reeling from a series of bumps over the past few days.

In a written statement, Romney called the Iowa results a "virtual tie" and praised Santorum's "strong performance" in the state.

It was a far different type of day when Romney touched down in South Carolina just over a week ago, coming off what appeared to be twin victories in Iowa and New Hampshire.

Since then, Romney has been confronted by attacks from his opponents on everything from his tax returns to his changed positions on social issues like abortion. And he's made unforced errors talking about his own personal wealth and defending the private equity firm he founded, Bain Capital.

On Tuesday, Romney disclosed that he pays an effective tax rate of about 15 percent, lower than what he would pay if he earned a regular paycheck rather than making most of his income in dividends, capital gains and other returns on investments. He also called "not very much" the amount he earned in speechmaking fees: $373,327.62 for 12 months in 2010 and early 2011.

His campaign has repeatedly refused to answer more questions about his fortune, and the candidate himself has tried to change the subject by attacking Gingrich as he inches up in polls.

Regardless of the outcome of the primary Saturday, Romney's past 10 days have played into the hands of Democrats who are looking to paint him as an out-of-touch multimillionaire during the general election.

In the meantime, Democrats planned a series of news conferences to argue that the work Romney did at Bain Capital wasn't the same as bolstering American manufacturing.

President Barack Obama's campaign advisers contend voters are unlikely to back a wealthy Republican with financial-industry ties at a time of lingering economic distress.

The questions about Romney's wealth began last week in New Hampshire when he told an audience he knew what it was like to worry about being "pink-slipped" and losing a job. A day later, he said, "I like being able to fire people who provide services to me" -- a comment about health insurance companies that his rivals used to paint Romney as out of touch with ordinary Americans.

In a moment that was clearly unscripted, Romney disclosed for the first time Tuesday that, despite his wealth of hundreds of millions of dollars, he has been paying taxes in the neighborhood of 15 percent, far below the top maximum income tax rate of 35 percent, because his income "comes overwhelmingly from investments made in the past."

He's also refused to answer questions about why he invests in funds that are domiciled in the Cayman Islands, a popular destination for international investments. An Associated Press examination of Romney's 2012 presidential financial disclosure found at least six holdings in offshore-based funds totaling between $7 million and $32 million. There is no indication Romney used the accounts to dodge his U.S. tax obligations.

Depending how the funds are structured, though, some experts said, they can also be used to provide a legal way for American investors to indefinitely defer the payment of taxes until the money returns to the U.S.

During 2010 and the first nine months of 2011, the Romney family had at least $9.6 million in income, according to a financial disclosure form submitted in August.

The maximum marginal U.S. income tax rate of 35 percent applies -- in theory more than practice -- to households with taxable income of over about $388,500.


Stephen Braun in Washington contributed to this report.

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