Mitt Romney has every right in the world to keep his tax returns private, but not as a Presidential candidate. Americans go further in terms of requiring disclosure from politicians than anywhere else in the world, maybe too far.
Interestingly, disclosure of tax returns is voluntary but when it comes to Senate confirmations has become a de facto requirement. So even if Romney can duck disclosure and still become President, every one of his cabinet nominees will have to do what he's refusing to do. What is worrisome is that Romney's intransigence demonstrates a deficit in terms of his qualifications as a political leader.
His adamant refusal is unjustifiable, politically speaking, and will swamp his Presidential campaign. On the other hand it may be a trap to lure Democrats into making allegations then putting the lie to them.
But that's doubtful. He's getting grief and accusations from his fellow Republicans. The airwaves, loyal to both parties, are alive with debates on the issue. Unlike arcane or insider spats, this issue has "legs" and will be easily carried into the voting booth in November: Let's see, voters will think, shall I vote for the guy who doesn't pay taxes or the guy who does?
This is why Republican pundits and politicians are publicly lining up against him. It's also why, I suspect, he has taken so long to announce a running mate: Some of those on his shortlist have publicly called for him to publish his tax returns immediately.
By the way, not paying taxes is not illegal if all the proper loopholes are deployed. And refusing to publish your taxes is not illegal either. It's just impolitic. Worse yet, Romney's stance flouts some of the underlying principles of good leadership: Teamwork, consensus, transparency and fairness or a financial commitment commensurate with what other Americans must bear. In fact, the only defense would be the right to privacy.
Unfortunately, his own father and other presidential candidates long ago waived the privacy rights and began to fully disclose their financial and tax situations. In 1968, his father published 12 years' worth of his tax returns when he ran for President.
In fact, the real concern is not about privacy but about secrecy. Matthew Dowd, former advisor to President George W. Bush speculated about this publicly this week: "There's obviously something there, because if there was nothing there, he would say 'Have at it.' So there's obviously something there that compromises what he said in the past about something."
Romney's only released tax return, followed pummeling by rivals a few months ago, showed that he paid an effective tax rate of only 13.9 per cent, less than a single parent in St. Louis would have to pay in taxes. He also has said that his 2011 tax rate will be 15.9 per cent, or slightly more than the HST charged in some Canadian provinces for haircuts.
To some, Americans may appear to be going too far, but not to me. In Canada and other mature parliamentary democracies, politicians disclose assets, liabilities and income to a "conflict" commissioner, not to the public. Summaries are available but details are not and tax returns are not disclosed to anyone. Full disclosure should be required.
In April, British Prime Minister David Cameron said he would break with tradition and happily disclose his tax returns if such disclosure is what Parliament decides should happen. His hand was forced by government scandals involving the Murdoch press empire and financial intermediaries but also his Chancellor of the Exchequer, George Osbourne, said he would be "very happy" to publish ministerial tax returns prior to the next election.
The impetus was the precedent set by London's flamboyant Mayor Boris Johnson and his three rivals who in April all disclosed their past four years' income and taxes. Mayor Johnson made £1.7 million during those four years and paid an effective tax rate of 40 per cent. His main rival paid 33 per cent on income of £343,041.
One commentator also suggested that health records be posted, another requirement in the U.S. system. "Why stop there?" he asked. That's already required in the U.S. and should be required in Canada and elsewhere. People should know if leaders have disabilities, chronic illnesses and negative prognoses.
If Canada had required the same level of disclosure (or even that required in publicly-listed companies) who knows how differently the country would have evolved. Then there is the dreadful Canadian Senate that is populated by bagmen, party favorites, friends and persons with directorships involving businesses that interact with the Government of Canada.
As for those duly elected over the years, I can name a couple of political leaders who would not have won election if their tax situations -- or lack of taxes paid -- had been disclosed. But that's just a guess because until transparency becomes law, we all must remain in the dark like mushrooms.
This article originally appeared in the Financial Post.
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