In the latest spat between Mitt Romney and Newt Gingrich, Gingrich has repeatedly demanded that Romney make public his tax returns.
Romney has refused to do so at this point, saying he will release them in April, at tax filing deadline.
Why is this important? Well, Gingrich has indicated that he paid an effective 31% tax rate on his earnings, hoping to show up Romney, whose earnings are primarily from investments and taxed at a lower rates.
Romney stepped forward in the debate of the tightening South Carolina primary and has now said that he paid taxes “in the region of 15%” – the capital gains rate.
Does this matter? To the average middle class taxpayer, who pays in the 30+% range in taxes, it very well might, explaining Romney’s reluctance to reveal his taxes before April, when he hopes to have sewn up the nomination.
If he loses in South Carolina, the strategy might well backfire and even if Romney wins the Republican primary, expect to see this issue resurface in the general election as David Plouffe and the Democrats take notes.
The discomfort shown by Romney during the debate over this issue and the booing by the South Carolina debate audience may well be offset by the accusations of Marianne Gingrich’s (Newt’s second wife) about Newt wanting an ‘open’ relation with his then-mistress – now wife, Callista.
The latter accusation is likely fatal for Newt, regardless of whether he is able to pull out a victory in South Carolina.
So what about Romney paying an effective tax rate of 15%, given his stated fortune of about $270 million? Does that seem fair? Should he release his latest tax returns before the South Carolina primary?