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Mitt Romney’s Tax Returns: The reasoning behind choosing to not release them

News about presidential elections is all but impossible to avoid every four years. This election cycle has been particularly heated, with the country more divided on key issues than arguably any time since the Civil War. It seems that compromise in congress is impossible, as working with the other side somehow shows weakness. With this bickering and fighting going on with our nation’s elected officials, there are always hoards of news agencies and independent bloggers ready to analyze recent developments in the campaigns.


If you have followed the news within the last few months, you would have noticed that there has been a lot of criticism of Mitt Romney for not releasing multiple years of his income tax returns. A big issue this election is fairness in the tax system, and Democrats accuse Romney of having abused loopholes that he now vows to close. Regardless of what the truth behind the tax returns is, the Romney campaign has refused to release any more, and the Obama campaign and the democrats have accused Romney of paying little or no taxes during those years. According to the Huffington Post, “Ann Romney said that releasing more detail on the family’s taxes would merely give the Obama campaign ‘more ammunition.’”


This situation is modeled well using game theory. The Romney campaign has two choices, and the Obama campaign has two choices. There is the choice between releasing and not releasing tax returns, and the choice of asserting that Mitt Romney paid no income taxes.


Both campaigns understand the entire game, especially since both employ a number of expert political analysts. Because it is difficult to give an accurate estimate of how these actions affect voter’s favorability of the candidates (although a CNN/ORC poll said that 61% of voters “demand” he release the returns), I will be using numbers only meant to show relative favorability of each campaign’s actions.


Romney Campaign

Don’t release Release
Obama Campaign Accuse Romney of paying nothing in taxes 2, -2 -11 or 20, -15
Don’t accuse Romney of paying nothing in taxes -1, 0 -6, -3


In this game, the numbers can represent percentage changes in favorability ratings for the candidates. The Romney campaign has a dominant strategy of not releasing more than two years of tax returns, and given this information, the Obama campaign will gain some favorability by accusing Romney of paying no income taxes for some years. However, if the Romney campaign did release tax returns, and it turned out the Obama campaign was lying about him paying nothing (which we don’t know, hence the “-11 or 20”, then the Obama campaign would lose some favorability. If the Romney campaign released more tax returns, and the accusations were true, then it would be devastating for the Romney campaign. Since this has not happened, it is safe to say that the Romney campaign would be more damaged by releasing the returns than by not releasing them, so it is depicted this way in the game. Also, if the Obama campaign were not making these accusations, it would still benefit the Romney campaign to not release tax returns, perhaps for reasons other than the a low tax rate he paid.


We saw many similar games to this in class, where factions must make decisions based on each other’s dominant strategies. Based on Ann Romney’s comments and the opinions of likely voter’s, it makes sense that the Romney campaign will not release more tax returns and that the Obama campaign will continue to accuse Mitt Romney of paying little or nothing in taxes.







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