Romney's taxes, speaking fees become SC liability

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Newt Gingrich's decision to release his tax returns today indicates he senses that front-runner Mitt Romney is vulnerable as the candidates approach Saturday's primary in South Carolina.

In the first days of the South Carolina campaign, Gingrich challenged Romney's business record at private equity firm Bain Capital, prompting political analysts to wonder why he would attack a fellow Republican from the Left.

But when Romney gave a faltering answer about his tax returns in a debate Monday night, it bolstered Gingrich's strategy to pound the front-runner for exploiting the financial system at the expense of middle-class workers.

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Romney said in the debate that he would "probably" release his returns in April. The following morning, he revealed that his effective tax rate was about 15 percent because most of his income over the past decade came from investments.

Gingrich said his own tax rate is 31 percent.

When Romney explained his tax rate, he also said, "I get speaker's fees from time to time, but not very much." Yet Romney actually earned $374,328 from speaking fees in 2010 and early 2011, according to financial disclosure forms released earlier this year.

His speaker fees comment was yet another gift to opponents, from both Left and Right, seeking to portray Romney as "out of touch."

Compounding Romney's image problems, ABC News reported Wednesday evening that he had millions of dollars invested in funds based in the Cayman Islands, which is often used as a tax haven.

Democrats led by President Obama have hammered the idea that wealthier Americans don't pay their fair share of taxes. The theme has become a key part of the Democrats' election strategy.

Democratic National Committee Chairwoman Debbie Wasserman Schultz, D-Fla., appearing on MSNBC on Wednesday, said Romney's rate was "dramatically different from the middle class." She blasted the former Massachusetts governor as "someone who is only interested in making people who are doing really well do even better" by "extending tax breaks for the wealthiest Americans."

Obama has frequently spoke of the "Buffett rule" in his speeches on making the tax code more progressive, a reference to billionaire investor and campaign backer Warren Buffett, who says he pays a lower effective tax rate than his secretary. But the so-called "rule" may soon get a different name.

"The Romney Rule is going to be a major issue if Romney is the GOP nominee," Paul Begala, an adviser to Democratic super-PAC Priorities USA, told the liberal website Talking Points Memo. "Republicans win the tax debate when the middle class feels they're paying too much. But Democrats win it when the middle class believes the wealthy are paying too little."

New Jersey Gov. Chris Christie, who has been campaigning hard for Romney, said on NBC's "Today" show Wednesday that Romney should "put [his tax returns] out sooner than later because it's always better to have full disclosure."

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