A tumultuous week on the campaign trail has upended expectations for Saturday's critical South Carolina Republican primary. A week ago, Mitt Romney had a commanding lead in the polls and seemed poised to cement his status as the GOP's presumptive nominee.
Since then, Jon Huntsman and Rick Perry have dropped out of the field, narrowing the "anti-Mitt" options a bit, while Rick Santorum was declared the winner of the Iowa caucus, dinging Romney's front-runner status a bit. Now, less-than 24 hours before the S.C. primary begins, Romney finds himself locked in a statistical tie with Newt Gingrich, who has been surging in the polls.
Those trends were only reinforced in Thursday night's CNN debate, where Gingrich scored big by attacking the press, effectively turning a story about alleged wrongdoing in his personal life into a tactical advantage.
Meanwhile, Romney stumbled again to address a question about his income taxes. For the second time this week, the former private equity titan failed to directly answer a question about when he'll release his returns, opening the door for criticism from both his Republican rivals and the DNC.
"He has to decide, if there's nothing in there, why not release them, and if there is something in them, better to know now," Gingrich said.
Ahead of the debate, Gingrich released his returns, which showed the former speaker made $3.1 million in 2011, on which he paid nearly $1 million in taxes, or an effective rate of 31.5%. Earlier in the week, Romney revealed his effective tax rate is around 15%, suggesting the bulk of his income comes from capital gains, dividends and/or deferred income from Bain Capital, the private equity firm he founded.
In addition, ABC News reported Romney "has millions of dollars of his personal wealth in investment funds set up in the Cayman Islands."
The Romney campaign said the Cayman funds give Romney no tax advantage and there's nothing illegal about them; the same is presumably true of Romney's 15% tax rate and the candidate stressed last night he's got nothing to hide. "I pay my full taxes, I'm honest with people, I pay a lot of taxes, I've been very successful, and when I have my taxes ready for this year, I'll release them," he said during the CNN debate.
But, as Henry and I discuss in the accompanying video, the optics of Romney's wealth and tax returns present a major problem for the candidate, especially given the heightened focus on income inequality in America following the Occupy Wall Street movement last fall. (See: When $375,000 Is 'Not Very Much': Mitt Romney Is Tone Deaf, Cohan Says)
Furthermore, the fact Romney has thus far failed to adequately and succinctly address these issues -- which could not have come as a surprise to the campaign -- is damaging his standing with voters. Romney is still very likely to be the Republican nominee but, at a minimum, the coronation has been delayed and is now far-less certain than it appeared just a few days ago.