Mitt Romney And The Privileges Of The Very Wealthy: “Thanks, Much Obliged”
What better person than the French-speaking Mitt Romney to lay bare the pure beating heart of noblesse oblige.
Sunday morning’s NBC debate in Concord, N.H. was a vast improvement over the ABC one the night before — it occurred to the non-Romney candidates that they might want to train their fire on the man who’s up 20 points in the New Hampshire polls. Their focus trailed off as the debate progressed, but Rick Santorum and Newt Gingrich did manage to produce a revealing exchange at the outset regarding Romney’s motivations to enter politics. They challenged Romney’s oft-repeated claim that he, unlike they, was no career politician but rather a man who saw running for office as the duty of a good citizen who, when his work is complete, returns like Cincinnatus to his plow, or to his carried-interest loophole for private equity investment managers, as the case may be. In the best zinger of the debate, Gingrich chalked this up as a bunch of “pious baloney.” But it is these lines of Romney that should get the attention. From Ben Smith’s writeup:
Mitt Romney suggested in today’s debate that only rich people should run for office, and then quickly celebrated the fact that he’d forced a rival to take out a loan against his house. Romney said his father, Michigan Governor George Romney, had told him, “Mitt, never get involved in politics if you have to win an election to pay a mortgage.”
“If you find yourself in a position when you can serve, why you ought to have a responsibility to do so if you think you can make a difference,” he recalled his father telling him. “Also, don’t get in politics if your kids are still young because it might turn their heads.”
A few seconds later, he bragged about his run against Teddy Kennedy. “I was happy he had to take a mortgage out on his house to ultimately defeat me,” he said.
The exchange with Newt Gingrich brought out Romney at his most tone-deaf, and echoed his offer of a $10,000 bet to Rick Perry in an earlier debate. Romney’s rivals are already looking for ways to turn his wealth — and his tone-deaf treatment of it — into a liability. The Obama campaign regularly blasts him as out-of-touch with the lives of American workers.
So: the person running on the vision of a “merit” and “opportunity” society opposed to Barack Obama’s “entitlement” society believes that politicians should be independently wealthy, not peons who have to rely on the paltry earnings of a U.S. senator or governor. It’s worth noting that this is hardly the first time that Romney has depicted his move into politics in 1994 in this light. In his 2007 piece about Romney’s relationship with his father, who after running American Motors became governor of Michigan and ran for president in 1968, Jonathan Cohn wrote: “George Romney had always said the ideal time to run for public office was after you had achieved financial independence and your children were old enough to put up with the loss of privacy.” So Mitt today was just echoing the advice of the father he revered. But of all the aspects of George Romney that are to be admired — including many lacking in his son — this brand of noblesse oblige wasn’t one of them. Once again, I’m simply amazed that the Republican Party, at a time of heightened consciousness about the privileges of the very wealthy, is on the verge of nominating a quarter-billionaire who, when presented with the notion of running for president, says: thanks, much obliged.
By: Alec MacGillis, The New Republic, January 8, 2012
“Class-Warfare Plutocrat”: Weak Man Romney Running For President
Newt Gingrich isn’t right about much. But he’s onto something about Mitt Romney’s weaknesses as the GOP candidate. Gingrich has been saying that the idea that Romney is electable is “just silly”: “I find it amazing the news media continues to say he is the most electable Republican when he can’t even break out in his own party. But the fact is that Gov. Romney in the end has a very limited appeal in a conservative party.” There are ways in which Romney is the least electable of the remaining plausible candidates. These issues, all having to do with economics (the country’s and Romney’s own), surfaced this week, and assuming he is the nominee, they’ll get plenty of air time between now and November.
On Thursday, we got the first major analysis of Romney’s tax plan, and it’s predictably reactionary. Taxes on the working poor would actually increase, says the Tax Policy Center. Households in the $50,000 and slightly above range would see a small decrease of 2.2 percent, or around $250. Households bringing in more than $1 million a year would see a decrease of 15 percent, or roughly $146,000. In some other country, this alone would be shocking and self-disqualifying. In 2012 America, sad to say, it marks Romney’s plan as slightly less extreme than those of his competitors. But the essential instinct to genuflect to the ultra-rich is intact.
In the Occupy era, Romney’s plan will be vulnerable to attack on those grounds alone. People aren’t exactly taking to the barricades demanding more tax cuts right now, least of all more giveaways to the very top earners. One poll just before Christmas asked people to rank the importance of addressing unemployment, reducing the deficit, or cutting taxes. Results, respectively: 55, 29, and 12 percent. Most people have a sense that taxes are pretty low these days, which, viewed historically, they are.
But Romney’s tax plan is most vulnerable on the deficit. The Tax Policy Center found that Romney’s tax plan would add $600 billion to the deficit in 2015. That’s a lot of cabbage; nearly half of the current deficit, which is now right just under $1.3 trillion (and projected to go under $1 trillion next year). So in other words, just as the deficit is starting to come down—an issue of great importance to swing voters, by the way—Romney is proposing a massive increase in the deficit, so the rest of us can write $146,000 checks to people who take home $1 million (not “millionaires”; people who make $1 million every single year). Obama—whose own tax plan, by the way, is estimated to reduce the deficit by around $300 billion over five years—ought to be able to destroy such a plan. The Romney people will respond, as they have to this study, with the usual lie about lower tax rates unleashing the dynamism of a newly free people and so on. It will be just as false as it was in the 2000s when the Bush people said it, and I think this time around, enough voters will be able to smell the rat.
So far, all this just makes Romney your run-of-the-mill class-warfare plutocrat. But combine it with the second Romney tax issue—his own—and I start to see the guy’s jaw turning into glass before my very eyes.
Romney will not release his tax returns. Why he won’t is a matter of speculation, but it seems a reasonable guess that he doesn’t want people to see what he’s been still making off of his earlier work at Bain Capital (remember, he’s been “unemployed” for a few years now), and he doesn’t want them to see that he’s been paying tax on this income at a rate of 15 percent rather than 35 percent. Last October, Michael Scherer of Time reported that the Romneys made somewhere between (love the size of these categories!) $6.6 million and $40 million—the vast majority of it in capital gains, which are taxed at 15 percent. A couple earning together around $100,000 in straight salary almost certainly pays a higher effective rate than the Romneys.
Then there are all of Romney’s clumsy lies about the number of jobs he created at Bain, which Greg Sargent first exposed earlier this week. Basically, Romney counted jobs gained at firms Bain reorganized long after he left the firm in 1999, but he didn’t count any jobs lost at firms Bain reorganized. I’d love to do my household budget that way, counting only the good stuff.
An ultra-rich man whose economic plan helps the ultra-rich and explodes the deficit, and who can’t be straight with the public about his own income taxes—that’s who’s leading the GOP field. He’s still probably more electable than Gingrich, or Rick Santorum, whose skeezy, Abramoff-related entanglements will soon see the light of day. But that isn’t saying much. Romney is vastly overrated by liberals as a general election foe. Sure, if the economy backslides, Romney could win, simply by not being the incumbent. But short of a new economic crisis, he’s a huge target. If Democrats want something to worry about, they can worry about the EU, or terrorism. But Mitt Romney? He may be the GOP’s only non-joke candidate, but that doesn’t mean he’s a strong one.
By: Michael Tomasky, The Daily Beast, January 7, 2012
Taking The Endorsement Game “To A Whole New Level”: Romney Endorsers Received Contributions First
Money may not be buying Mitt Romney much Republican love, but it’s going a long way toward helping him buy the next best thing: endorsements in the GOP primaries.
Romney’s Free and Strong America PAC and its affiliates states have lavished close to $1.3 million in campaign donations to federal, state and local GOP politicians, almost all since 2010. His recipients include officials in the major upcoming primary states of New Hampshire and South Carolina, and in three southern Super Tuesday states where he was trounced four years ago.
In New Hampshire, a U.S. senator, a congressman, 10 state senators and three executive councilors shared $26,000 in donations from Romney’s Free and Strong America PAC in 2010 and 2011 combined. All 15 have showered Romney with endorsements leading up to Tuesday’s primary
South Carolina Gov. Nikki Haley came out for Romney last month – a year after his Free and Strong America PACs funneled $36,000 to the Tea Party darling’s 2010 election bid. And 19 state and Washington, D.C., lawmakers in three Super Tuesday states – Georgia, Tennessee and Virginia — are backing Romney after his PAC poured a total of $125,500 into their coffers for elections held in 2009 and 2010.
“This is as old as politics itself,” Edwin Bender, executive director of the National Institute of Money in State Politics. “He’s just taking it to a whole new level.”
Julian Zelizer, a Princeton University political scientist, said Romney’s gambit is a smart strategy for a deep-pocketed candidate. “He’s investing wisely and trying not just to run up the numbers where he’s strong, but trying to build it up where he’s weakest,” Zelizer said.
Nowhere has Romney spent as heavily – and harvested the rewards – as in Tuesday’s must-win state of New Hampshire. Romney’s Free and Strong America PAC and its Granite State affiliate invested some $53,000 to help local officials win races, and another $13,000 for congressional and Senate candidates.
New Hampshire state Sen. Sharon Carson said in a press release that she took the time to examine the “backgrounds and qualifications of each of the candidates” running for president before she backed Romney on Dec. 27. She received $1,000 from Romney’s federal Free and Strong America PAC for her winning 2010 reelection bid.
Kelly Ayotte – a Tea Party Republican who won a U.S. Senate seat – received $5,000 from Romney’s PAC in 2010 for her winning bid and $2,500 from the PAC in 2011, according to federal records. She endorsed Romney in November.
U.S. Rep. Charlie Bass also endorsed Romney in November. He received $3,500 from Romney’s PAC in 2010 and and $2,000 2011 from Romney’s PAC. State Senate President Peter Bragdon endorsed Romney Dec. 1. He received $1,000 from Romney’s Free and Strong America / New Hampshire PAC on Oct. 4, 2010.
Dante Scala, a University of New Hampshire political scientist, said Romney needs 35 to 40 percent of the vote to be viewed as the winner. Romney’s strategy of snatching up local endorsements has resonated with Granite State residents, and that’s reflected in the widening gap in the polls.
“They want to suck all the oxygen out of the primary,” Scala said. “And so far they’ve succeeded.”
After his crushing 2008 campaign defeat, Romney created the Free and Strong America leadership PAC to contribute to local, state and federal officials’ campaigns.
According to the Federal Election Commission and OpenSecrets.org, the PAC donated $890,299 to some 167 congressional and Senate candidates in 2010, while distributing another $404,226 in 2010 to state and local candidates, according to state campaign finance records collected by FollowTheMoney.org.
If Romney’s been chided for being too moderate, he’s shown little moderation when it comes to the mother’s milk of politics: money.
“Clearly, the one thing Mitt Romney has to his advantage is money, and the best way to use it in the early stages is to spread it around to build up a political organization,” said Michael Dennehy an unaligned New Hampshire GOP operative. “Now, it appears he’s reaping the benefits.”
Romney is already earning dividends in states where he suffered embarrassing setbacks in 2008. In South Carolina, for example, Romney placed a distant third behind Mike Huckabee and John McCain.
Romney trumpeted the backing of Haley in December. The pair are touring South Carolina Friday and New Hampshire this weekend. His Free and Strong America PAC raised a lofty $36,000 for her in 2010.
Romney also is bolstering his support in three March 6 Super Tuesday states where his showing was dismal in 2008.
In Georgia, where Romney finished a distant third behind Huckabee and McCain, Free and Strong spent $36,000 in 2010 on 24 state candidates. So far, 11 have endorsed Romney ahead of the primary. Another nine congressmen received $25,052 in 2010 from the PAC, and four are backing Romney.
In Tennessee, another Super Tuesday state where Romney also finished third, Romney netted the backing of U.S. Reps. Diane Black and Jimmy Duncan. They were among GOP state and federal Tennessee candidates who split $17,500 from Romney’s Free and Strong America PAC in 2010.
In 2008, Romney placed fourth behind McCain, Huckabee and Ron Paul in Virginia. But this year he snagged the backing of Lt. Gov. Bill Bolling and Rep. Barbara Comstock, who were among the recipients of some $27,500 donated by the Free and Strong America PAC.
So far, the spending has paid off not just in endorsements but in the development of a campaign infrastructure, experts said. This will help Romney against less well-funded rivals when the primaries are in several states simultaneously and particularly on Super Tuesday, when surrogates are vital in many places at once.
But there’s a risk, Zelizer warned, that over-spending could get Romney painted as an out-of-touch elitist trying to buy his delegates.
“He doesn’t want this to backfire and look like he has so much money, he’s buying an election, he’s buying a nomination,” Zelizer said.
There’s also controversy. For while the practice of contributing to campaigns in exchange for endorsements isn’t new, the New Hampshire and Alabama Democratic Parties have filed complaints with the Federal Election Commission. They charge that the Free and Strong PACS coordinate with the state affiliates to circumvent federal and state campaign laws. The PACs have denied any wrongdoing.
Dennehy, the GOP operative, said that rather than complain, others should wonder why they’re not exerting their political muscle as effectively as Romney.
“He’s the only one who donated a sizable amount of money to dozens of elected officials,” Dennehy added. “Let’s face it. When no one else gives you money, you don’t think long and hard who’ll you’ll give your endorsement to.”
By: Edward Mason, Salon, January 7, 2012
Mitt Romney’s Tax Plan: Very Progressive By 15th Century Standards
The Tax Policy Center has completed an analysis of the distributional effects of Mitt Romney’s tax plan, and as might be expected it’s quite good for you if you’re raking in the big bucks, and not particularly helpful if you’re not. For the bottom 80% of the income distribution, federal tax rates would drop between 0.6% and 3.4%. For the top 20%, they’d drop 5.9%; for the top 1%, they’d drop 8.6%. That means the regular-joe taxpayer at the middle of the distribution gets a cut of about $1,400, while a taxpayer in the top 1% gets a cut of $171,000. Kevin Drum cracks wise:
[C]onservatives are right to believe that Romney isn’t to be trusted. Sure, he lowers tax rates on millionaires by 9 percentage points, and you may think that’s a pretty sweet deal for the rich. But come on. Newt Gingrich would lower them by 24 percentage points. (No, that’s not a typo.) Rick Perry lowers them by 20 percentage points. Herman Cain lowers them by 15 points. Frankly, Romney is hardly even trying here.
Along similar lines, and because I’ve been reading about this stuff lately, I’d like to point out that in the long historical context the tax rates Mr Romney is proposing are still extremely progressive. In fact, up until at least the 15th century or so, tax rates in the Western world were generally higher for poor people than they were for rich people. In early Renaissance Florence, as Tim Parks explains in his highly readable “Medici Money“, almost all state revenues were raised from excise taxes on consumption, while the holdings of the wealthy were exempt from almost any form of routine taxation. This state of affairs persisted until 1427, when the cost of hiring mercenaries to protect the city from the Duke of Milan, the French, and basically everyone else in the free-for-all of Italian politics rose so high that they had to introduce a universal tax called the catasto. This exempted about a third of the poorest households, while everyone over a certain level of income had to pay a flat tax of 0.5% on their wealth—a wildly progressive move in its day.
Meanwhile in Flanders, as John Munro writes in “The Usury Doctrine and Urban Public Finances in Late-Medieval Flanders (1220-1550): Rentes (Annuities), Excise Taxes, and Income Transfers from the Poor to the Rich“, state finance came to rely increasingly on issuing annuities paying an annual income. This was because the Catholic church’s rulings on usury made it increasingly difficult for sovereigns to borrow at interest. The Pope said it was okay to issue the annuities as long as the taxes used to pay them came from the produce of the land, safely removing them from the unnatural auto-reproduction of money implied in usury. That meant, again, that taxation mainly consisted of excise taxes on consumption, and “the obvious significance of this form of public-finance related taxation was that it was essentially very regressive, in representing a far greater burden on the poor than on the middle classes, let alone the rich.” Since most people who could buy and hold state annuities were rich, it was a pretty direct transfer of wealth from the poor to rentiers.
So, again, while it’s true that Mr Romney’s tax plans represent a large net transfer from the poor to the rich if you start from the baseline of current tax law, they’re actually pretty progressive if you’re willing to start from a pre-modern baseline.
By: Democracy in America, published in The Economist, January 6, 2012
Mitt Romney Has A Big Tax Problem
Mitt Romney has been insisting for a while that he will not cut taxes for the rich, which everybody took to mean that he would lock into place the enormous, expiring Bush-era tax cuts for the rich, but cut taxes no deeper than that. He has said so over and over again. Here he is saying, “If I’m going to use precious dollars to reduce taxes, I want to focus on where the people are hurting the most, and that’s the middle class. I’m not worried about rich people.” And here’s Romney insisting, “I’m proposing no tax cuts for the rich.”
Today the Tax Policy Center analyzes his plan, and it turns out that Romney would, in fact, cut taxes for the rich, even below current levels. The highest-earning one percent would get an additional tax cut averaging $82,000 a year. Romney’s plan would also raise taxes on the lowest quintile by an average of $157 a year.
That the leading Republican wants to cut taxes for the rich is not exactly man-bites-dog. But it is a huge political liability for him. Raising taxes on low-income earners is unpopular, cutting taxes for the rich is unpopular, and doing it when you’re a wealthy scion who looks like a wealthy scion is extremely unpopular. That’s why Romney has been furiously insisting he won’t cut taxes for the rich.
Ross Douthat, taking Romney’s claims at face value (like many of us did), confidently asserted yesterday that he has avoided exposing himself to the charge of cutting taxes for the rich. Romney, he wrote, is “campaigning instead on a revenue-neutral tax reform and a modest tax cut for middle class investors, neither of which leaves him particularly vulnerable to the charge of “giving massive tax breaks to the rich.”
Turns out he’s not. And his plan isn’t revenue-neutral, either. It would add $180 billion to the deficit in 2015.
What makes this report tougher for Romney is the timing. He’s already under pressure from conservatives upset with his pledge not to cut taxes for the rich. If he had already wrapped up the nomination, Romney could just say, “oops, we screwed up the plan,” and release a new one that holds taxes for the rich at their Bush-era levels and doesn’t raise them on the working class. But that would be a tricky move in the midst of a primary. Anyway, the changes he’d have to make would be very large — $180 billion a year is big money, requiring a major revamp of his plan.
By: Jonathan Chait, Daily Intel, January 5, 2012
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