Members of Congress Demand Mittens Romney Release his Tax Returns But Won’t Release Theirs

According to Democratic Rep. Nancy Pelosi and Democratic Sen. Harry Reid, republican presidential candidate Mitt Romney’s refusal to release more than two years of his personal tax returns makes him unfit to hold the highest office in the land.

Sen. Reid took it a step farther saying that Romney’s refusal makes him unfit to be a dogcatcher.

They do not, however, believe as public servants that that same standard of transparency applies to them. The two Democratic leaders of the Senate and the House are among hundreds of senators and representatives from both parties who refuse to release their tax records. In all a total of 17 out of the 535 members of Congress released their most recent tax forms or some similar documentation of their tax liabilities in response to requests from mcclatchydc.com over the last three months. 19 replied that they wouldn’t provide the information, while the remainder ignored the query outright.

Congress stands to gain or lose by the very tax policies it enacts, and tax records, more than any broad financial disclosure rules now in place , offer voters a chance to see whether the leaders of the government stand to benefit from their own actions.

“Senior public officials, especially members of Congress and presidential candidates, should be required to disclose their tax returns so that the public can monitor potential conflicts of interest,” said Craig Holman, government affairs lobbyist for Public Citizen, a nonpartisan watchdog group.

Rep. Barney Frank of Massachusetts, the senior Democrat on the House Financial Services Committee and co-author of the Dodd-Frank financial reform bill, who critics say lacks any real teeth, was also among those who elected to not release their returns.

Challenged at a recent news conference to release hers, Rep. Debbie Wasserman Schultz of Florida, the chairwoman of the Democratic National Committee said she wouldn’t because she wasn’t running for president.

“I file full financial disclosure required under the law,” she said.

What’s required by law was written by Congress itself, and is a broad financial-disclosure statement that has no direct information on tax liabilities and does not require the reporting of the amount of spousal income, other than the source, over 1,000. There’s little way of knowing whether that spousal income is $1,001 or $1 million.

Several members of Congress have wealthy spouses. Topping that list are Rep. Michael McCaul, R-Texas, whose wife is an heiress to the Clear Channel Communications fortune, and Sen. John Kerry, D-Mass., whose wife is the heiress to the Heinz ketchup fortune. Pelosi’s husband heads Financial Leasing Services Inc., a San Francisco-based venture capital and real estate firm.

Missouri Democrat McCaskill was one of the few senators who provided her tax return. Her 1040 form lists her as married filing separately, showing an adjusted gross income of $193,384. Her husband, Joe Shepard, is a wealthy businessman who had investments in a reinsurance company in Bermuda, the same country in which Romney’s investments have been criticized by Democrats. Shepard no longer holds those investments after Republicans made allegations in 2009 of tax dodging.

Advocacy groups think that financial-disclosure reporting should be expanded to capture spousal income more fully, and argue that tax data would be a useful tool.

“As public officials, potential conflicts of interest caused by their wealth and assets are a public concern,” said Holman, the Public Citizen lobbyist.

Senate Democrats Drop Key Estate Tax Proposal

In an attempt to shore up support for President Obama tax plan, Senate Democratic leaders are eliminating a key provision to tax wealthy estates.

Democrats could not reach a consensus in the Senate Democratic Caucus over how much to tax estates transferred after a person’s death, prompting Senate Majority Leader Harry Reid to inform senators Thursday that he’d drop that provision. The bill would now cost $250 billion, down from the $272 billion, one-year cost of the original proposal, aides said.

“The majority leader wanted to focus on the middle-class tax relief,” Sen. Dick Durbin (D-Ill.) told reporters.

While the Obama tax bill has no chance of winning the 60 votes needed for passage, Democrats want to build at least a simple majority so they can point fingers at Republicans for protecting wealthy families at the expense of tax breaks for the middle class. Anything less than 50 votes would reflect poorly on the president.

Obama says he wants to let the Bush tax cuts expire for households with income over $250,000, and extend the rest of the rates for one year. Republicans want to extend all of the tax rates for everyone for one year, warning that any tax increase would have a negative effect on an already anemic economic recovery, a notion the president himself agreed with when extended the Bush tax cuts back in 2010.

A vote is expected next week on the Democratic plan, and Reid is confident Democrats will muster at least 50 votes, especially after dropping the estate tax provision. Sens. Jim Webb (D-Va.) and Joe Lieberman (I-Conn.) both have announced they would oppose the Obama plan.

The original version of the Senate Democrats’ tax legislation would have set the maximum tax rate of an estate valued at more than $3.5 million at 45 percent. Right now, there’s a 35 percent rate for estates worth more than $5.12 million. If Congress doesn’t act, estates worth $1 million will be hit with a 55 percent tax rate next year. Republicans have labelled the estate tax, the “death tax.”

To strengthen their arguments for extending all the current rates, Senate Republicans on Thursday circulated a study by the nonpartisan Joint Committee on Taxation that showed there was a mere $28 billion difference between the GOP proposal and the Democratic plan, which would end the current rates for household income of above $250,000. That difference, Republicans noted, equaled how much the government spends in a mere three days.

“The American people deserve better than to have the president and his allies threaten to melt down our economy for what amounts to less than three days of federal spending,” said Utah Sen. Orrin Hatch, the top Republican on the Finance Committee.

Sen. Chuck Schumer (D-N.Y.) dismissed the report as a “smokescreen” by Republicans.

“The truth is, if we decouple the tax cuts for those earning above $250,000, that means they will be gone for good,” Schumer said in a statement. “Over 10 years, that will reduce the deficit by $800 billion compared to what Republicans want to do.”