Here's what we know, or think we know, about Mitt Romney's tax returns: He's paying an effective rate of 15 percent. He has millions of dollars stored in investment funds in the Cayman Islands. And though he says “I have nothing in them that suggests there’s any problem," he originally wasn't going to release them at all, and though he backed off of that position, now he won't release them until April. Why wait till April? Well, here's one theory: April is after Super Tuesday.

Republican presidential candidate, former Massachusetts Gov. Mitt Romney, campaigns in Irmo, S.C., on Jan. 18. (Charles Dharapak/AP)

But if they're released before that, and they contain other embarrassing revelations, they may lead the GOP, or at least a substantial portion of it, to conclude that Romney is not the strongest candidate to put up against President Obama in November. So the Romney campaign appears to have made a simple judgment: if the candidate's tax returns are going to pose a problem, better they pose a problem when Republicans have nowhere else to go.

That makes good strategic sense for the Romney campaign. It's not as obviously a winning strategy for the Republican Party. In an editorial published last night, the conservative National Review put it starkly. "It is critical that Romney release his tax records now, that voters might 'take a look and decide if we’ve got a flawed candidate,'" they wrote. "We know that should Romney become the nominee, he will be criticized over the sources of his wealth and will have to effectively respond. Republican primary voters deserve to see whether he can do so before they vote."

Expect Newt Gingrich, who is mounting something of a comeback, to take up the call forcefully. Other Republican Party elites will, for less self-interested reasons, likely follow. Which leaves two question: First, can Romney really hold out until April? And second, with so much from his tax returns having already leaked out, what can be left in there that has Romney persuaded it's better to suffer these attacks than simply release the returns?

Top stories

1) The Obama administration rejected the Keystone XL pipeline, report Juliet Eilperin and Steven Mufson: "President Obama, denouncing a 'rushed and arbitrary deadline' set by congressional Republicans, announced Wednesday that he was rejecting a Canadian firm’s application for a permit to build and operate the Keystone XL pipeline, a massive project that would have stretched from Canada’s oil sands to refineries in Texas...The decision Wednesday and the language Obama used made clear that the White House, far from pushing off the issue until after the election, as it once hoped to do, was fully engaged in a battle with pipeline proponents. The president defended his administration’s record on energy security while pledging to protect the 'health and safety' of Americans. While the current Keystone XL permit application is dead, the pipeline might not be. The administration will allow TransCanada to reapply for a permit after it develops an alternate route around the Nebraska Sandhills, a sensitive habitat."

@drgrist: "Reapplying," for Transcanada, is not a trivial thing. New route, new EIS, new planning ... almost certainly prohibitive.

2) Anti-SOPA protests fueled growing congressional opposition, reports Jonathan Weisman: "Legislation that just weeks ago had overwhelming bipartisan support and had provoked little scrutiny generated a grass-roots coalition on the left and the right. Wikipedia made its English-language content unavailable, replaced with a warning: 'Right now, the U.S. Congress is considering legislation that could fatally damage the free and open Internet.' Visitors to Reddit found the site offline in protest. Google’s home page was scarred by a black swatch that covered the search engine’s label...First, Senator Marco Rubio of Florida, a rising Republican star, took to Facebook, one of the vehicles for promoting opposition, to renounce a bill he had co-sponsored. Senator John Cornyn of Texas, who leads the G.O.P.’s Senate campaign efforts, used Facebook to urge his colleagues to slow the bill down. Senator Jim DeMint, Republican of South Carolina and a Tea Party favorite, announced his opposition on Twitter, which was already boiling over with anti-#SOPA and #PIPA fever...At least 10 senators and nearly twice that many House members announced their opposition."

WONKBLOG EXPLAINS: Five reasons the Internet is still protesting SOPA and PIPA.

@chrislhayes: Kind of amazed at how quickly SOPA has travelled from under-the-radar to driving-the-news-cycle.

@binarybits: It would be a big deal (and a little disconcerting) if copyright became a partisan issue with Republicans as the good guys.

3) The tax plans of Republican candidates would boost the deficit, report Michael Cooper and David Kocieniewski: "When Mitt Romney suggested this week that he pays a lower tax rate than most wealthy Americans do, he refocused attention on his tax proposals -- which, like those of his major Republican rivals, would largely cut taxes for the rich while driving down tax collections and widening the nation’s deficit...The Romney tax plan would add to the deficit by reducing federal revenues by $600 billion in 2015, a 16 percent cut, the center found. Some of Mr. Romney’s rivals for the Republican presidential nomination are proposing tax cuts that would widen the deficit even more...It is not unusual for Republican presidential candidates to call for tax cuts that would expand the deficit: They argue the cuts will spur the economy. But they are now calling for tax cuts in a year in which Washington and many Republicans have been consumed by talk about reducing the deficit."

@R_Thaler: Biggest economic diffs if Romney is elected? 1. MUCH bigger deficits. Tax cuts + DoD surge=red ink 2. Even greater inequality. Disputable?

Wonkblog note: Yes, @R_Thaler is legendary behavioral economist Richard Thaler. Everyone is on Twitter these days!

4) The House took a symbolic vote against a debt ceiling increase, reports Naftali Bendavid: "The House voted Wednesday to reject President Barack Obama's request to raise the federal debt limit by $1.2 trillion, a symbolic act designed to let lawmakers oppose the increase while letting it take effect. A bipartisan deal last August gave Mr. Obama the authority to propose a limited number of debt-ceiling increases that can be blocked only by a two-thirds majority of both the Senate and House. Members of both parties stressed Wednesday that the vote would accomplish nothing, and some called it a charade. The tally was 239-176, largely along party lines, with all but three Republicans voting to reject the increase. One Republican, Rep. David Dreier (R., Calif.), joined most Democrats in supporting the increase, and two other Republicans voted 'present.' The Democrat-controlled Senate will vote on its own resolution of disapproval next week, and it is expected to fail."

5) Romney benefited from offshore tax havens, report Matthew Mosk, Brian Ross and Megan Chuchmach: "Although it is not apparent on his financial disclosure form, Mitt Romney has millions of dollars of his personal wealth in investment funds set up in the Cayman Islands, a notorious Caribbean tax haven...Tax experts tell ABC News there are other reasons Romney may not want the public viewing his returns. As one of the wealthiest candidates to run for president in recent times, Romney has used a variety of techniques to help minimize the taxes on his estimated $250 million fortune. In addition to paying the lower tax rate on his investment income, Romney has as much as $8 million invested in at least 12 funds listed on a Cayman Islands registry. Another investment, which Romney reports as being worth between $5 million and $25 million, shows up on securities records as having been domiciled in the Caymans...Tax experts agree that Romney remains subject to American taxes. But they say the offshore accounts have provided him -- and Bain -- with other potential financial benefits, such as higher management fees and greater foreign interest, all at the expense of the U.S. Treasury."

@nickconfessore: Much is unknown about Romney's taxes, but in general, offshore income earned by an American citizen is subject to same taxes as domestic.

Top op-eds

1) Romney should release his tax returns, writes The National Review: "During Monday night’s debate in Myrtle Beach, Mitt Romney was compellingly and cogently pushed -- by Rick Perry, no less -- on the issue of releasing his tax returns. The former Massachusetts governor sputtered. 'I have nothing in them that suggests there’s any problem and I’m happy to do so,' he replied. 'What’s happened in history is people have released them in about April of the coming year, and that’s probably what I would do.' Responding to a reporter the next day, Romney allowed -- again with modification -- that his effective tax rate is 'probably closer to the 15 percent rate than anything,' since most of his income comes from interest and investment. But if Romney hopes to defuse the issue, he’ll have to do better than a ballpark guess. He should release his current tax return, or, if it is not yet available, his 2010 returns, and he should do so now."

@jbarro: Does Romney have a position on carried interest taxation? Might neutralize tax return controversy by calling for closing the loophole.

2) Presidents follow through on their policy platforms, writes Ezra Klein: "I’ve been taking a hard look at the policy platforms of the Republican presidential contenders -- with some surprising results. For all the attention that Jon Huntsman got as the race’s sole moderate, his plan called for more -- and more regressive - - tax cuts than anything Mitt Romney put forward, and his approach to entitlement reform was well to Romney’s right. Rick Santorum’s post-Iowa boomlet focused on his blue-collar credentials, but on close analysis, his plans were far more regressive than those offered by silver-spoon candidates Romney and Huntsman. And though Romney is probably the most moderate candidate in the race, his campaign is well to the right of George W. Bush’s 2000 effort. I keep running into the same reaction: Who cares? It’s a fool’s game to spend too much time analyzing campaign policy proposals. Everyone knows that politicians make all kinds of crazy promises during elections that they jettison as soon as they take office. At least everyone thinks they know that. But it’s not true."

3) We don't need to stop online piracy, writes Matthew Yglesias: "Congressional bill names are a reliable indicator of the state of conventional wisdom in America. That Congress is weighing bills called the Stop Online Piracy Act and the Protect IP Act tells us that, at a minimum, the idea of stopping online piracy is popular. It shouldn’t be. There’s no evidence that the United States is currently suffering from an excessive amount of online piracy, and there is ample reason to believe that a non-zero level of copyright infringement is socially beneficial. Online piracy is like fouling in basketball. You want to penalize it to prevent it from getting out of control, but any effort to actually eliminate it would be a cure much worse than the disease. Much of the debate about SOPA and PIPA has thus far centered around the entertainment industry’s absurdly inflated claims about the economic harm of copyright infringement. When making these calculations, intellectual property owners tend to assume that every unauthorized download represents a lost sale. This is clearly false."

4) America's problem is healthcare costs, not overspending, writes Alan Blinder: "Try to ignore the current shallowness in American politics, if you can, and assume that the federal budget deficit will be among the major issues of the 2012 campaign. It certainly should be, for while everyone wants a lower deficit, the two parties have starkly different visions of how to get there...According to the CBO, if nothing is done, the primary deficit will bottom out at 2.6% of GDP in 2018 and then rise to 7.4% of GDP by 2040. Where will the additional 4.8% of GDP come from? Remarkably, every penny will come from health-care spending, which balloons from 6.6% of GDP to 11.4% in the projections, or 4.8% more of GDP. This exact match is just a coincidence, of course. If we use 2050 as the endpoint instead of 2040, the projected primary deficit increases by 6% of GDP, of which health-care spending accounts for 6.6 percentage points. Yes, you read that right: Apart from increased health-care costs, the rest of the primary deficit actually falls relative to GDP."

Indie rap interlude: Doomtree play "Bangarang" live on 89.3 The Current.

Got tips, additions, or comments? E-mail me.

Still to come: Home builders' confidence is up; CLASS Act repeal is one step closer; compromise on SOPA/PIPA is not likely; stoping Keystone XL won't stop oil sands; and a dog eats spaghetti.

Interview: Bill Clinton talks to Esquire about his presidency and the future .


@BCAppelbaum: File under "Problems We Don't Have" -- RT @stlouisfed: Find out why the unemployment rate can never actually reach zero

Romney's tax plan would cut his own taxes in half, reports Greg Sargent: "The revelation that Mitt Romney pays a tax rate of around 15 percent opens the door to another question: How much would his own taxes fall under the tax plan he would pass if elected president? Here’s the answer, according to a new analysis by Citizens for Tax Justice that was provided to me this morning. Under his plan, Romney in 2013 would see his taxes cut by nearly half of what they would be if you use current law as a baseline. Another way to put this: If Romney, whose wealth is estimated at as much as $250 million, is elected president and gets his way on tax policy, he would pay barely more than half as much in taxes than he would if Obama is reelected and gets his way -- and the Bush tax cuts on the wealthy expire and an additional Medicare tax as part of the Affordable Care Act kicks in."

Obama faces a choice over income level for raising taxes, reports Bernie Becker: "President Obama faces a difficult choice in his upcoming budget: Stick with his policy of raising taxes on families making more than $250,000 annually or boost that threshold to $1 million...Following historic Republican gains in the 2010 election, many congressional Democrats embraced the $1 million figure over fears that the GOP had gained the upper hand by criticizing the $250,000 mark. Democrats like Sen. Charles Schumer of New York have suggested that many families making $250,000 are not rich. He has acknowledged that Republicans scored political points by arguing that raising taxes on individual income above $200,000 and couples making more than $250,000 would hit a fair amount of small businesses. But while the president has adopted rhetoric calling on millionaires to pay their fair share, his proposals on the Bush tax cuts haven’t budged from $250,000."

Home builders' confidence has hit pre-recession levels, reports Sara Kehaulani Goo: "Confidence among the nation’s single-family home builders rose in January for the fourth consecutive month, according to the National Association of Home Builders/ Wells Fargo Housing Market Index released Wednesday. The survey, which asks builders about perceptions of single family home sales and about expectations going forward for the next six months, showed a four point increase in builder confidence to 25, the highest level since June 2007...The news comes after some positive signs in the national housing market in the last month, although 2011 is a year that many in the new housing market would rather forget. New housing starts fell to the lowest level on record last year. Most housing economists forecast a relatively flat 2012 this year, with a modest increase in the total number of home sales but little price appreciation."

The IMF is seeking up to $500 billion in new funding, reports Annie Lowrey: "The International Monetary Fund announced Wednesday that it was seeking as much as $500 billion more to lend as it prepared to slash its forecasts of global growth. The fund, based in Washington, estimated that the world would need $1 trillion in the coming years for loans to countries with short-term difficulties paying their bills or because of concerns about prospective trouble in the volatile bond markets. Given that the fund has unused lending capacity of about $380 billion, it said it would seek to raise as much as $500 billion in new money to lend, plus $100 billion as a cash buffer. The new money includes $200 billion that European Union countries committed in December...The International Monetary Fund made its announcement as it prepared to cut estimates of global growth in 2012 -- with economists warning not just about the effects of a possible double-dip recession in Europe, but also about new troubles in the emerging economies, including Brazil, India and Turkey, that have helped drive the global recovery."

Larry Summers may head the World Bank, reports Hans Nichols: "President Barack Obama is considering nominating Lawrence Summers, his former National Economic Council director, to lead the World Bank when Robert Zoellick’s term expires later this year, according to two people familiar with the matter. Summers has expressed interest in the job to White House officials and has backers inside the administration, including Treasury Secretary Timothy Geithner and current NEC Director Gene Sperling, said one of the people. Secretary of State Hillary Clinton is also being considered, along with other candidates, said the other person. Both spoke on condition of anonymity to discuss internal White House deliberations. Lael Brainard, the Treasury undersecretary for international affairs, is compiling a list of potential candidates to replace Zoellick, who was nominated to a five-year term that began in July 2007 by then-President George W. Bush."

That would be a bad idea, writes Felix Salmon: "Please, Barack, don’t do it! Hans Nichols is reporting today that Larry Summers wants to be the next head of the World Bank -- no surprise there -- and that Barack Obama is thinking of nominating him. It’s a dreadful idea. For one thing, Summers wouldn’t actually be very good at the job, since he doesn’t have any of the required qualifications. The only way to be an effective World Bank president is to be an effective diplomat. Like all CEOs, the head of the Bank reports to a board of directors -- but at the World Bank, the board of directors meets twice a week. And they’re not friendly hand-picked board members, either -- they’re political appointees who fight their geographical corners, who live full-time in Washington, and who work full-time out of offices within the Bank itself. If you want to get anything done at the Bank, you need to persuade the board to leave you alone and not micromanage every decision you make."

Stop motion interlude: 3D printer people come to life.

Health Care

Repealing health reform would prove difficult, report Brian Beutler and Sahil Kapur: "Should he win the nomination and the presidency, then on inauguration day in 2013, after all the pageantry has subsided, Mitt Romney will face a key test: does he take aggressive action to roll back Obamacare as he and every other GOP contender has promised? Or will he accede to pragmatic realities and seek detente with Democrats on the issue that has most divided the parties over the past three years? The amount of money, strategizing, myth-making, and political capital that Republicans have already thrown at the health care law will make it very difficult for Romney or any GOP President not to enter office with guns blazing. But many of the would-be policy makers who have made dismantling the law their top priority haven’t given any real thought to how, mechanically, to unwind it. A closer look reveals that chipping away at Obamacare, or even repealing it altogether will be a daunting challenge, and even if successful will leave the Republican party holding the bag politically for the policy muddle they will create in the process."

Efforts to repeal the CLASS Act moved forward, reports Sam Baker: "The House Ways and Means Committee voted Wednesday to repeal the healthcare law’s controversial CLASS program, clearing the way for a floor vote next month...Ways and Means passed its CLASS repeal bill, sponsored by Rep. Charles Boustany Jr. (R-La.), by a 23-13 vote. The measure will come to the floor next month, an aide to House Majority Leader Eric Cantor (R-Va.) said. Democrats said during Wednesday’s markup that Congress should be focused on a solution to the CLASS Act’s woes and the growing need for long-term care...Republicans say the dormant program needs to be formally taken off the books, warning that leaving it legally intact would allow the Obama administration to revive the implementation effort and could expose the White House to lawsuits."

Medicare cost-cutting programs have mostly failed, reports Sam Baker: "Programs designed to cut Medicare spending and improve the quality of healthcare have mostly failed, according to the Congressional Budget Office. The findings are a blow to existing Medicare projects as well as a key goal of the healthcare reform law. There is widespread support, in Congress and among economists, for the broad ideal that Medicare would save money if it paid for better outcomes instead of more procedures. But 20 years of trying to shift the program in that direction have yielded little to no progress, CBO said Wednesday. CBO analyzed six programs designed to improve care coordination for patients with chronic diseases. They either made no difference or were actually more expensive than the traditional payment system."

Domestic Policy

@jacobwe: I expect you anti-SOPA people are right, but the techie groupthink makes me want to argue the other side.

Compromise on antipiracy legislation looks unlikely, report Jennifer Martinez and Kim Hart: "Amid all the shouting over SOPA, neither side is in the mood to talk compromise, and the chasm between them is as big as the San Fernando Valley. The problem is there’s no obvious middle ground. You either force the Googles and Yahoos of the Web to delete links to pirate sites, or you don’t. You allow copyright holders to go to court to shut down sites they think are stealing their content, or you don’t...After the success of the Internet blackout, however, not everyone is in a compromising frame of mind. Many lawmakers up for reelection in the fall would like to dodge the issue now that the voting masses have been riled up because it’s better to say on the campaign trail that you killed SOPA than it is to say you made it work. Lobbyists entangled in the debate are reluctant to talk about potential compromises because they don’t want to show their cards or relinquish any leverage in future negotiations."

Entertainment companies are outspending tech companies on lobbying four to one, reports April Dembosky: "Media and entertainment companies are outspending tech companies at a ratio of four to one in the lobbying contest over the Stop Online Piracy Act - the 32 politicians backing the bill have received almost $2m in campaign contributions from the film, music and TV industries, compared with little more than $500,000 that ­politicians opposing the proposals have received from the computer and internet industries, according to MapLight, a campaign finance research company. Overall, financial contributions to politicians who support the bill outnumber contributions to politicians opposed to it by 13 to one, with $92.2m spent in favour, compared with $7.2m opposed, between January 1 2009 and June 30 2011, the latest data show. With that backing, the entertainment industry was able to influence lawmakers to sponsor both Sopa and its sister bill, the Protect Intellectual Property Act."

Obama's recess appointments may not withstand court challenges, reports Alexander Bolton: "Some legal experts, including those who have sided with President Obama on other constitutional issues, think there is a good chance the courts could overturn his recent recess appointments. Legal experts said courts could invalidate Obama’s appointments to the Consumer Financial Protection Bureau (CFPB) and National Labor Relations Board (NLRB) because there is scant precedent on the issue. 'It’s untested ground. If I were a judge, I could write out an opinion either way. There’s no clear precedent,' said Charles Fried, a constitutional expert at Harvard Law School who served as solicitor general under former President Reagan...Fried, who has sided with the Obama administration on challenges to the constitutionality of healthcare reform, said courts might not be willing to judge what qualifies as working sessions of the Senate, especially considering how much time the chamber spends on quorum calls lately."

Adorable animals being adorable interlude: A dog eats spaghetti.


Blocking Keystone XL won't stop oil sands, reports Martin Kaste: "President Obama is feeling election-year pressure over the pending decision on the Keystone XL pipeline. Republicans say the Canadian project would provide the U.S. with oil and new jobs, but environmentalists want Obama to block it. They say Alberta's oil sands generate more greenhouse gases than other kinds of oil, and Americans must not become dependent on such a dirty source of energy. But it may already be too late to change that...Philip Verleger, an economist who specializes in oil markets, says even if environmentalists convince Obama to block the Keystone XL pipeline, it won't stop the growth of production in the Canadian oil sands. 'With prices around a hundred dollars a barrel globally, that oil is going to make it to the market somehow,' Verleger says. 'The development may be slowed for a year or two. But one can move the oil west on the existing Kinder Morgan pipeline. They could expand pipelines east. Those pipelines already exist, and they can be expanded.'"

But it's a big win for climate activists, writes Bill McKibben: "I wrote the first book on global warming way back in 1989, so I know for a fact that there have been very few days in the last two decades when the scientists have been smiling and big oil scowling. When the president denied the permit for Keystone XL on Wednesday, he didn’t just turn the usual balance of power upside down, he turned the conventional wisdom more or less on its head--as late as October, a National Journal poll of 300 D.C. 'energy insiders' showed 91 percent predicting that the pipeline would be approved. The victory is of course a tribute to people who set aside their natural cynicism about the possibility of change and instead went to jail in record numbers, wrote public comments in record numbers, surrounded the White House shoulder to shoulder five deep. They managed to bring reality to the forefront for once, and that reality--the leaky pipeline, the oil destined for export, the carbon overload from the tar sands--managed to trump, for now, the bottomless pockets of the fossil fuel industry."

Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.