Bill White and the Politics of Taxes

Democratic presidential nominee Walter Mondale saying at his party's national convention that he'd raise taxes if elected. Gov. Bill Clements getting blasted by his fellow Republicans for signing what was then the largest tax bill in state history after promising he wouldn't. And the granddaddy: President George H.W. Bush breaking his "read my lips" pledge to sign a tax bill — a move that helped hold him to one term in office. The best examples of taxes tripping high-level politicians are a couple of decades old, but they still shape the conversation.

Now it's Bill White's turn. Just a few days out of the primary, the Democratic nominee for governor is having to answer questions about not making his tax returns available to the press and about declining to drink the no-new-taxes potion.

The political class learns from its mistakes, and in modern politics, two tax questions float up every election cycle: Promising (or not) to veto any tax bills that come up, and releasing (or not) the candidate's personal income tax returns. The first is more dangerous, but the second — partly because it hits a media hot button — can be a persistent pest to a candidate. Gov. Rick Perry has played both sides. He regularly releases his personal income tax returns, and has taken the no-tax pledge this time around. Eight years ago, he wouldn't say yes or no, as in this quote fished out of the archives by the Austin American-Statesman this week: "Hypotheticals are fun, but the bottom line is people of the state of Texas want to hear the governor talk about how he's going to make the budget work, and that's what I've done over the course of this campaign."

That same year, he was taunting Democrat Tony Sanchez Jr. for his income tax returns. Sanchez released some information about his finances, but didn't let loose of his 1040s. He lost, but that's probably not what sunk him. "It's a disclosure deal," says Glenn Smith, who ran the Democrat's campaign. Smith says the tax return question usually doesn't do much more than pester a candidate.

Unless the candidate makes a mistake.

Twenty years ago, Clayton Williams Jr. demonstrated the difference between someone trained in business and someone trained in politics. Talking to a small group of reporters about a looming budget shortfall and the hefty price tags on programs he wanted to start, he was asked what remedies he'd be willing to consider. He answered like a businessman, saying he wouldn't rule anything out until he'd had a chance to look at the problem and consider the alternatives. Even an income tax? "If the drug crisis has increased as much in the next five [years] as it has the last five, we might have to do it," Williams said at the time. "But I'm not saying I'm for it — I'm not. I'm not for that."

One of his Republican primary opponents, Kent Hance, won the race to smack Williams in the forehead for that one ("It is hard to believe that Mr. Williams, who wants to be the standard-bearer of the Texas GOP, has not just left the door open to an income tax but has completely removed the hinges"). Within hours, Williams was just as opposed to the income tax as Hance was, promising that if elected he would, "veto any, every and all attempts to pass a state income tax." It turned out not to matter. Williams won the primary (over three serious opponents and three minor ones, and without a runoff), but he wasn't through talking about taxes.

Ann Richards had been hounding him to release his tax returns. Williams refused to do it. She sent a big truck to his campaign headquarters and offered to cart the documents to the press. He refused. On his final campaign swing before the 1990 general election, it came up again. Asked if he'd always paid his taxes, he said he had, except in 1986, when his losses in the oil patch offset the taxes he owed. That's all Richards needed to finish him off. That night at a Houston union hall, she got off a line in time for Saturday's newspapers in that pre-internet age: "Clayton Williams didn't pay any taxes in 1986 … Did you?"

Smith, who was on Richards' staff during that race, says the prodding got under Williams' skin but wasn't enough by itself: "It wouldn't have hurt Claytie if he hadn't screwed up."

That brings us to 2010, and White. The former Houston mayor, asked by the Tribune's Evan Smith whether he would rule out tax increases in the face of looming budget shortfall, declined to do so. Perry pounced — attacking just like Hance and Richards and countless others before them. Perry himself wasn't doing the talking, but his campaign had previously issued a demand for White's income tax returns and added the charge that he had opened the door for higher taxes should he win in November.

This is as much about how the race for governor will be run as it is about taxes. Perry is relying on an established argument and traditional voter expectations. One ally, who worked on the Williams campaign 20 years ago, put it this way: "You have to do a few things when you run for office in Texas. You have to debate. You have to release your tax returns. And you have to say you won't raise taxes." White's trying to change the way the argument goes.

"What I did when running for mayor of Houston is I never committed to whether I would raise or lower taxes," he said in the TribLive interview. "I would say the same thing, that I've got to look under the hood and see how the economy is at the time, and make sure that we're able, that the revenues equal the expenses, and that I would do everything possible in order to maintain fiscal discipline on the revenue side. Period. ... I did not commit to do it because until you look under the hood and see what you can do and what the state of the economy is and what the tradeoff is, you shouldn't be making that decision. That decision shouldn't be made on the basis of a sound bite or a political ploy. It should be made on what you need in order to accomplish your goals."

The reply from the Perry camp arrived a couple of hours later. In the words of spokesman Mark Miner: "Bill White has a tax problem – he won't rule out raising taxes for Texans and refuses to release his own tax returns. His opposition to transparency raises questions about what he is afraid of and what he is hiding regarding his own personal fortune and how he may have profited during his six years as Houston's mayor."

Asked if he knew he was supplying ammunition to the enemy, White shrugged. "They'll mislead people anyway."

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