Attacks on Romney for offshore assets, taxes heat up

CEDAR RAPIDS, Iowa/GRAND JUNCTION, Colo. Tue Jul 10, 2012 8:55pm EDT

U.S. President Barack Obama speaks during an event on extending the Bush-era tax cuts for middle class families at Kirkwood Community College in Cedar Rapids, Iowa, July 10, 2012. REUTERS/Jason Reed

U.S. President Barack Obama speaks during an event on extending the Bush-era tax cuts for middle class families at Kirkwood Community College in Cedar Rapids, Iowa, July 10, 2012.

Credit: Reuters/Jason Reed

CEDAR RAPIDS, Iowa/GRAND JUNCTION, Colo. (Reuters) - President Barack Obama's re-election team stepped up attacks on Mitt Romney for holding offshore assets and urged him to release more tax returns, pushing hard on an issue that could be a weak point for the Republican presidential candidate.

The Obama campaign and top Democrats took to the Internet and airwaves on Tuesday with accusations that Romney is being secretive about his wealth as they seek to cement an image of the Republican candidate as a multi-millionaire who is out of touch with ordinary Americans.

The intensity of the Democrats' criticism suggested they feel they have got hold of an issue that could knock points off Romney's opinion poll numbers, like they did by accusing him of firing blue-collar workers when he was an executive at Bain Capital private equity firm.

An ad from the Obama campaign urged Romney to release more tax returns to give details of money in foreign havens like the Cayman Islands and Bermuda.

"Why is Mitt Romney hiding the rest of his tax returns?" asked a new Obama ad, which had the sound of a ticking clock in the background. "How long can Romney keep information on his investments in overseas tax havens secret? And why did he do it in the first place?"

Republicans say the focus on Romney's personal wealth - estimated at up to $250 million - is an attempt to divert attention from Obama's failure to improve the struggling economy and high unemployment rates.

Obama's running mate, Vice President Joe Biden, joked in a speech to a Hispanic group about Romney's reluctance to release more than two years of tax returns.

"He wants you to show your papers, but he won't show us his," Biden said, referring to Romney's support for a tougher line against illegal immigration.

OUT OF TOUCH

"And this is a man who says President Barack Obama is out of touch. Out of touch with the needs of the American people. This coming from a man who until recently had a Swiss bank account and millions of dollars invested in the Grand Cayman Islands ... beyond scrutiny," Biden said.

Romney, who is one of the richest men ever to run for U.S. president, has released his 2010 tax returns and estimates for 2011 but has been reluctant to make public any more.

His taxes were an issue during the Republican primaries when it became known that he is paying an effective tax rate of around 15 percent, lower than that paid by most top wage earners. The issue resurfaced in recent days due to media articles about his investments abroad.

The former Massachusetts governor says the foreign holdings are handled by blind trusts which he does not control.

"I can assure you of this - I have followed the law, I have paid my taxes as due," Romney said on the Sean Hannity radio show.

"What he has done is one attack after another ... suggesting that I would engage in something that is illegal, that is criminal, that I would hide assets and not pay the taxes that were owed. It's amazing," Romney said.

Obama extended his lead over Romney to 6 percentage points in a Reuters/Ipsos poll released on Tuesday.

It was unclear how effective the attacks on Romney's personal wealth and offshore assets might be. But surveys have shown that a previous portrayal by Democrats of Romney as an out-of-touch rich man did hit his poll numbers.

Negative ads targeting him as a job killer during his time as an executive in the 1980s and 1990s lowered support for the Republican in swing states.

In Grand Junction, Colorado, Romney turned around earlier accusations by Obama that Bain Capital outsourced U.S. jobs to cheaper countries abroad.

"By putting money into energy companies - solar and wind energy companies that end up making their products outside the united states. If there's an outsourcer in chief, it's the president of the United States, not the guy who's running to replace him," Romney said.

OBAMA AND 'TAX FAIRNESS'

Obama pushed his message of "tax fairness" on a visit to the election battleground state of Iowa where he touted calls for middle-class tax relief and painted Republicans as the party that favors the rich.

A day after he proposed extending Bush-era tax cuts for families making less than $250,000 annually, Obama told a campaign rally that if Congress did not act, the average family of four would have to pay about $2,200 more in taxes next year.

In an effort to portray himself as able to understand ordinary Americans, Obama noted how he and his wife Michelle also worked hard to manage all the different bills during the early years of their marriage.

"We should make sure the taxes on the 98 percent of Americans don't go up and then we should let the tax cuts expire for folks like me, for the top 2 percent of Americans," Obama, his top shirt button undone and tie casually askew, told a cheering crowd of about 1,600 at a local community college.

"To give me another tax break, or to give Warren Buffett another tax break or to give Mitt Romney another tax break, that would cost ... about a trillion dollars. And we can't afford it," he said.

The Democratic president's emphasis over two days on tax relief gave him an opportunity to shift attention away from his handling of the economy after government data last week showed another month of weak job growth.

"People are worried about their own bank accounts, not Mitt Romney's bank accounts," said Tony Fratto, a Republican consultant and former deputy spokesman for President George W. Bush.

"These are silly diversions that the Obama campaign is trying to throw out there to avoid talking about the real issues that people are worried about which are jobs," he said.

Former Republican Party chair Haley Barbour said on CNN on Monday that if he were in Romney's shoes, he would release more than two years of tax returns.

But like other Republicans, Barbour said it should not be a campaign issue. "I don't think it amounts to diddly," he said.

In April, Romney estimated his tax liability at $3.2 million for last year, having released estimates in January indicating he expected his family's income for 2011 to be $20.9 million. That would put his tax rate at about 15.3 percent, far below the top U.S. tax rate on wages of 35 percent.

The Obamas paid an effective tax rate of 20.5 percent on income of $789,674 last year, the White House said. They earned half their income from his presidential salary of $395,000 and the rest from book sales.

(Writing by Debbie Charles; editing by Alistair Bell and Mohammad Zargham)

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