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POLITICS

Romney strikes back at Reid over tax claim

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Photo - Senate Majority Leader Harry Reid (AP Photo)
Senate Majority Leader Harry Reid (AP Photo)
Politics,Congress,Susan Ferrechio,Campaign 2012,Politics Digest

When he accused Republican presidential candidate Mitt Romney of not paying taxes for a decade, it seemed to Senate Majority Leader Harry Reid like a political knockout punch.

Reid, the top Democrat on Capitol Hill and a onetime competitive boxer, leveled the charge repeatedly against Romney, including on the Senate floor. He's drawn sharp rebuttals from Romney and his allies, but Reid had the backing of other leading Democrats, including House Minority Leader Nancy Pelosi, who said Reid's charge "is a fact" even though she doesn't know the source of the accusation.

Romney on Tuesday called on Reid to reveal his source and said it's unlikely that such information came from a Bain investor. Reid, he told Fox News, "lost a lot of credibility."

House Minority Leader Nancy Pelosi
2010 net worth: Up to $196.2 million
2010 assets: Up to $204.5 million
2010 taxes paid: Undisclosed*
Senate Majority Leader Harry Reid
2010 net worth: Up to $10.3 million
2010 assets: Up to $10.4 million
2010 taxes paid: Undisclosed*
Presidential candidate Mitt Romney
2011 net worth: Up to $250 million
2011 assets: Up to $255 million
2010 taxes paid: $3 million (13.9% on $21.7 million) in 2010
*Congress does not require the release of tax returns
Source: Finance Disclosure Forms

Two political fact-checking sites called Reid's assertion dubious.

"Reid has made an extreme claim with nothing solid to back it up," PolitiFact.com concluded. "Pants on Fire!"

Tax experts say it's possible for someone as affluent as Romney to escape paying any taxes or at least substantially reduce what they owe. Charitable deductions, buying tax-exempt bonds and deducting investment losses are all legal means of reducing a tax burden.

"It's absolutely possible," said Edward Kleinbard of the University of Southern California's Gould School of Law.

Still, experts told The Washington Examiner, it's not likely Romney escaped paying any taxes for a decade, as Reid claims.

"It is exceedingly unlikely, especially for someone who knows he is running for president for quite a long time," said Paul Caron, a tax law professor at the University of Cincinnati College of Law.

In 2010, Romney paid about $3 million in federal income taxes, or about 13.9 percent on an annual income of $21.7 million, according to the only full tax returns he has made public.

Still, Reid insists he learned from an "extremely credible" former investor in Romney's Bain Capital that Romney paid no taxes for 10 years. He would not identify the source.

"With all due respect to Sen. Reid, what he has said publicly on this I think is absurd in the sense that he claims an investor at Bain told him," Caron told The Examiner. "There is no way an investor at Bain would be privy to any of Mitt Romney's personal tax returns. That part of the story doesn't ring true at all."

Reid and other Democrats are trying to pressure Romney to release more tax returns. Romney released his 2010 return and an estimate of his 2011 taxes, but said he won't release any others. Democrats claim Romney is hiding something.

"The fact that he doesn't want to release them makes it look as if he has something to hide," said Bob McIntyre, director of Citizens for Tax Justice, a liberal-leaning think tank.

Neither Reid nor Pelosi will make public their tax returns. Financial disclosure forms they are required to file show both are wealthy.

But even some Republicans are now urging Romney to release his returns and shift the debate back to the weak economy and persistent unemployment.

"I'm of two minds about this," Republican strategist Matt Mackowiak said. "Why give your opponent additional rope to hang you with, but on the other hand, every minute the national media is focused on this tax issue, it gets the race away from the economy."

sferrechio@washingtonexaminer.com

sferrechio@washingtonexaminer.com

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Susan Ferrechio

Chief Congressional Correspondent
The Washington Examiner