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New Obama Ad: Romney Oversaw 'Fictitious' Tax Losses for Marriott New Obama Ad: Romney Oversaw 'Fictitious' Tax Losses for Marriott

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The Trail: 2012 Presidential News from the Field / Campaign 2012

New Obama Ad: Romney Oversaw 'Fictitious' Tax Losses for Marriott

The ad relies on an op-ed by two tax lawyers who say Romney approved the reporting of $70 million in Marriott losses that a court later invalidated.

photo of Naureen Khan
August 9, 2012

As Mitt Romney sticks to his position that he won’t be releasing any more than two years of tax returns, the Obama campaign is out with a television ad that opens up a new line of tax attacks.

The ad, which will run in swing states Virginia, North Carolina, Florida and Ohio starting next week, urges the presumptive Republican nominee to “come clean” about his tax returns. Then it moves into new territory rooted in a recent op-ed by tax lawyers Peter Canellos and Edward Kleinbard.

The pair suggest Romney was involved in a “Son of Boss” tax shelter scheme at Marriott while he was chairman of the company's audit committee. Echoing the op-ed, the ad calls Son of Boss "one of the largest tax avoidance schemes in history" and says Romney while at Marriott "personally approved" the reporting of “$70 million in fictional losses to the IRS” through that type of shelter. Bloomberg News reported earlier this year that a federal appeals court "invalidated" Marriott's Son of Boss maneuver in 2009.

 

Romney spokeswoman Amanda Henneberger called the new ad a "dishonorable and dishonest attack." She said Obama doesn't have an economic record to run on, so "he has decided to run a dirty campaign that is an affront to everything he claims to stand for.”

The ad opens with a clip of ABC News reporter David Muir asking Romney if there was ever any year in which he paid lower than a 13.9 percent tax rate.Romney answers , “I haven’t calculated that. I’m happy to go back and look.”

A voiceover asks if Romney paid 10 percent, 5 percent or 0 taxes, ending with “We don’t know.”

Romney has released his 2010 return and a draft of his 2011 return, and has said he will release his full 2011 filing, for which he received an extension, when it is ready later this year. Based on what he's made public so far, the Obama campaign has been highlighting his use of tax shelters in Switzerland, Bermuda and the Cayman Islands.

Obama's latest ad comes as other reports of Romney’s tax history have been surfacing. Bloomberg News recently reported that Bain Capital funneled profits through subsidiaries in Luxembourg in one high-profile sale to avoid income taxes in other European countries while Romney was at its helm. A Los Angeles Times story documents the Romneys'  “months-long effort to reduce their annual property tax bill” on their home in La Jolla, Calif. over the last few years.

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