A lot of people inside the Beltway are tut-tutting about the recent campaign focus on Mitt Romney’s personal history — his record of profiting even as workers suffered, his mysterious was-he-or-wasn’t-he role at Bain Capital after 1999, his equally mysterious refusal to release any tax returns from before 2010. Some of the tut-tutters are upset at any suggestion that this election is about the rich versus the rest. Others decry the personalization: why can’t we just discuss policy?
And neither group is living in the real world.
First of all, this election really is — in substantive, policy terms — about the rich versus the rest.
The story so far: Former President George W. Bush pushed through big tax cuts heavily tilted toward the highest incomes. As a result, taxes on the very rich are currently the lowest they’ve been in 80 years. President Obama proposes letting those high-end Bush tax cuts expire; Mr. Romney, on the other hand, proposes big further tax cuts for the wealthy.
The impact at the top would be large. According to estimates by the nonpartisan Tax Policy Center, the Romney plan would reduce the annual taxes paid by the average member of the top 1 percent by $237,000 compared with the Obama plan; for the top 0.1 percent that number rises to $1.2 million. No wonder Mr. Romney’s fund-raisers in the Hamptons attracted so many eager donors that there were luxury-car traffic jams.
What about everyone else? Again according to the policy center, Mr. Romney’s tax cuts would increase the annual deficit by almost $500 billion. He claims that he would make this up by closing loopholes, in a way that wouldn’t shift the tax burden toward the middle class — but he has refused to give any specifics, and there’s no reason to believe him. Realistically, those big tax cuts for the rich would be offset, sooner or later, with higher taxes and/or lower benefits for the middle class and the poor.
So as I said, this election is, in substantive terms, about the rich versus the rest, and it would be doing voters a disservice to pretend otherwise.
In that case, however, why not run a campaign based on that substance, and leave Mr. Romney’s personal history alone? The short answer is, get real.
Look, voters aren’t policy wonks who pore over Tax Policy Center analyses. And when a politician — say, Mr. Obama — cites actual numbers in a speech, well, there’s always a politician on the other side to contradict him. How are voters supposed to know who’s telling the truth? In fact, earlier this year focus groups given an accurate description of Mr. Romney’s policy proposals refused to believe that any politician would take such a position.
Perhaps in a better world we could count on the news media to sort through the conflicting claims. In this world, however, most voters get their news from short snippets on TV, which almost never contain substantive policy analysis. The print media do offer analysis pieces — but these pieces, out of a desire to seem “balanced,” all too often simply repeat the he-said-she-said of political speeches. Trust me: you will see very few news analyses saying that Mr. Romney proposes huge tax cuts for the rich, with no plausible offset other than big benefit cuts for everyone else — even though this is the simple truth. Instead, you will see pieces reporting that “Democrats say” that this is what Mr. Romney proposes, matched with dueling quotes from Republican sources.
So how can the Obama campaign cut through this political and media fog? By talking about Mr. Romney’s personal history, and the way that history resonates with the realities of his pro-rich, anti-middle-class policy proposals.
Thus the entirely true charge that Mr. Romney wants to slash historically low tax rates on the rich even further dovetails perfectly with his own record of extraordinary tax avoidance — so extraordinary that he’s evidently afraid to let voters see his tax returns from before 2010. The equally true charge that he’s pushing policies that would benefit the rich at the expense of ordinary working Americans meshes with Bain’s record of earning big profits even when workers suffered — a record so stark that Mr. Romney is attempting to distance himself from part of it by insisting that he had nothing to do with Bain’s operations after 1999, even though the company continued to list him as C.E.O. and sole owner until 2002. And so on.
The point is that talking about Mr. Romney’s personal history isn’t a diversion from substantive policy discussion. On the contrary, in a political and media environment strongly biased against substance, talking about Bain and offshore accounts is the only way to bring the real policy issues into focus. And we should applaud, not condemn, the Obama campaign for standing up to the tut-tutters.
By: Paul Krugman, Op-Ed Columnist, The New York Times, July 15, 2012
July 17, 2012
Posted by raemd95 |
Election 2012 | Bain Capital, Bush Tax Cuts, Deficit, media, Middle Class, Mitt Romney, Politics, Tax Avoidance, Tax Returns |
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Mitt Romney wanted to have his cake and eat it, too. He wanted to make himself fabulously rich, be the captain of the financial universe, and become senator, governor and, now, president.
He wanted to do it all, without making public his financial dealings, his tax returns, his web of foreign tax shelters. That was his business, not the public’s. He should have chosen one path or the other—in his case, they don’t mix.
Mitt Romney was too cute by half. He was guaranteed payouts at Bain no matter how many bankruptcies, lost jobs, destroyed pensions. He thought parking money in off-shore Bermuda corporations, Swiss and Cayman accounts, and using fancy accounting gimmicks to create tax avoidance schemes could be either kept secret or explained away.
Now Republicans are calling for him to come clean, to release his tax returns, to untangle the web of financial dealings. But he can’t because he was up to his eyeballs in Bain when he said he wasn’t, as he continues to reap huge amounts of money from his years there.
So why all this back and forth on whether he “retired” from Bain in 1999? Simple. Ted Kennedy caught him in the Senate race in 1994 by exposing Bain and what it did to workers and companies.
When Romney saw a big opening with the takeover of the Olympics in February of 1999, he grabbed it and by 2001 he knew he had a shot at being governor of Massachusetts and maybe a great deal more.
But he also knew that Bain was a liability in another race in Massachusetts and decided that his “leave of absence” better become a “retirement.” After all, he was disengaged from the day-to-day operation of the company, even though reaping a six figure salary as an officer and many millions more because of his association as “president, CEO and sole stockholder.”
The last thing Mitt Romney wanted to do as he was planning his political future was have that Bain albatross around his neck again—no, the Olympics was his ticket.
But, now he has this very big problem—he can’t release his income taxes back 12 years as his father, George Romney, did when he ran for president. He can’t provide 23 years of tax returns as he did to the McCain campaign when he was angling for vice president and being vetted.
Tax returns will show his continued financial windfall from Bain and it will show all his off-shore shenanigans. And it will show that this is someone who was not paying his fair share of taxes according to almost anyone’s definition. That is my guess.
When Kevin Madden, his spokesman, read a statement that Romney did not put his money in foreign bank accounts and trusts to avoid taxes he was not asked the very simple question: Why did he do it, if not to avoid taxes? What was the reason for all these off-shore accounts? What was he trying to hide?
And now, Romney is in real trouble. If he is transparent about his financial dealings and taxes, he knows it would be devastating to his campaign. If he tries to stonewall, he has three and a half months of a long campaign, not three and a half weeks. That is a long time to keep trying to change the subject.
So the question for Romney is: Can he have his cake and eat it, too? Can he simply deny further requests for information and hope he can keep it secret?
While he is telling the middle class to “eat cake,” maybe he has to be careful he won’t be eating crow.
By: Peter Fenn, U. S. News and World Report, July 16, 2012
July 17, 2012
Posted by raemd95 |
Election 2012 | Bain Capital, Jobs, Middle Class, Mitt Romney, Offshore Accounts, Outsourcing, Politics, Republicans, Tax Returns |
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“Too much money” sounds like an oxymoron, especially when applied to American politics. But in the last week, Republicans are beginning to learn that lots of money can have its downside. Thursday’s story that Romney may have actively directed Bain Capital three years longer than he claimed – a period in which Bain Capital-managed companies experienced bankruptcies and layoffs – caps what must be the worst weekly news cycle of any modern American presidential candidate. From images of corporate raiding, to luxury speedboats, to offshore accounts in the Cayman Islands, to mega-mansions in the Hamptons, this week’s stories suggest that the candidacy of Mitt Romney – poster-boy for the symbiotic relationship between big money and the modern Republican party – is in serious trouble.
Last weekend’s photos of the Romney clan on a luxury speedboat cruising around a lake in New Hampshire, where their multimillion-dollar compound sits, were startling in their tone-deafness. And just to make sure the sentiment wasn’t lost on anyone, at a campaign event the same week, Obama recounted childhood memories of touring the US with his grandmother by Greyhound bus, even the thrill of staying at a Howard Johnson motel. In a smart political calculation, the Obamas chose to forgo their annual summer vacation in Cape Cod (a nice upper-middle class vacation spot, mind you, but nowhere near the same league as the Romney estate). Instead, Obama was photographed visiting a senior citizens’ home in the battleground state of Ohio.
And the hits kept coming. Next, Vanity Fair published an article listing the Romneys’ various offshore investment accounts worth potentially hundreds of millions of dollars in the secretive tax havens of Cayman Islands and Bermuda, as well as a since-closed Swiss bank account. Democrats stoked the predictable outrage from the revelations. On the Sunday ABC news program “This Week”, Maryland Governor Martin O’Malley thundered:
“Mitt Romney bets against America. He bet against America when he put his money in Swiss bank accounts and tax havens and shelters.”
On the same program, Bobbie Jindal, Republican governor of Louisiana, could only lamely respond:
“In terms of Governor Romney’s financial success, I’m happy that he’s a successful businessman.”
While there is no evidence that the Romneys illegally evaded taxes through their various offshore accounts (their secretiveness making it impossible to tell), the reek of entitlement became overwhelming when it was revealed that the Romneys had accumulated somewhere between $20m and $101m in an “IRA”, a tax-advantaged retirement account designed for middle-class savers, limited to a few thousand dollars a year contribution. As one commenter parried, “I may be stupid, but I ain’t no fool.” In other words, we might be too stupid to understand how Romney was able to obtain all these tax breaks legally, but we aren’t fooled about unfairness of it all.
Well, at this point, you might think that the next sighting of Romney would be of him clothed in ash-cloth ladling out soup at an inner-city soup kitchen. But no. Next, we were regaled with the New York Times story of a lavish fundraiser in the Hamptons hosted by the infamous David Koch, the billionaire benefactor of conservative causes. The optics were worse than bad, as the Times recounted how one woman in a Range Rover, idling in a 30-deep line of cars waiting for entry, yelled to a Romney aide, “Is there a VIP entrance? We are VIP.”
Romney was expected to haul in several million dollars from his trip to wine and dine with the billionaires of the Hamptons. But why risk confirming the very message that Democrats have been hammering upon: that Romney is a super-wealthy elitist whose objective is to further the interests of the 0.01%?
Certainly, billionaires for Romney would have given him those millions without the face-time and the photo-ops, the chance to dress up and be seen. And to be heckled by Occupy Wall Street protesters and parodied by reporters. What is so very puzzling about the whole episode is the sheer in-your-face-ness of it.
Yet, perhaps that is the point. As a very perceptive article in the New York Magazine, Lisa Miller describes how new psychological research indicates that wealth erodes empathy with others. In the “Money-Empathy Gap”, Miller cites one researcher who says that:
“The rich are way more likely to prioritize their own self-interests above the interests of other people. It makes them more likely to exhibit characteristics that we would stereotypically associate with, say, assholes.”
Researchers found a consistent correlation between higher income, management responsibility and disagreeableness. One researcher interpreted her findings to imply that money makes people disinterested in the welfare of others. “It’s not a bad analogy to think of them as a little autistic” says Kathleen Vos, a professor at the University of Minnesota.
If this research is accurate (as it seems to be, replicated in various ways by several researches), the synergies between it, the increasing concentration of wealth and the Citizens United ruling, have striking implications for the future of the Republican party. As Newt Gingrich, the uber-southern politician, plaintively explained how he lost the Republican primary: “Romney had 16 billionaires. I had only one.” The domination by the super-wealthy means that Republicans not only have no interest in the welfare of the rest of the 99.9%, they have no understanding of why this is a problem. The noblesse oblige days of the old money, such as the Bushes, the Kennedys and the Roosevelts are long gone, replaced by the new mega-money of hedge funds, corporate raiders and global industrialists.
How else can one explain the allegiance of the Republican party to the profoundly unpopular Ryan tax plan, which would eviscerate Medicare and Medicaid while delivering more tax cuts to the rich? What is the future of a party in a democracy when the powers-that-be can no longer even understand, much less address, the welfare of the vast majority of its citizens?
Taking the hint, the Obama administration is finally positioning itself firmly on the side of progressives, attacking income inequality and holding Republicans accountable for their assaults on the middle and working classes. How ironic it would be if, after all, the other side’s big money is the answer to the Democrats’ prayers.
By: Robin Wells, The Guardian, July 12, 2012
July 15, 2012
Posted by raemd95 |
Election 2012 | Bain Capital, Conservatives, GOP, Middle Class, Mitt Romney, Offshore Accounts, Politics, Republicans, Tax Returns |
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Our subject for today is the care and feeding of small businesses.
“I love you guys,” Mitt Romney told a teleconference hosted by the National Federation of Independent Business. “I love the fact that you’re working hard to follow your dreams and to build businesses. I — I love you guys. I love the fact that you’re — that you’re working hard to — to follow your dreams and to — and to build businesses.”
To summarize: We love you, guys.
And they’re everywhere! The Small Business Administration defines a small business as one with fewer than 500 workers, and that’s 99.7 percent of everything out there. “There are 5.7 million firms with employees in this country, and about 5.7 million have fewer than 500 employees — rounding slightly,” said Robert McIntyre, the director of Citizens for Tax Justice.
It’s sort of metaphysical, when you get right down to it. I am you as you are me and we are one and we are all small businesses. Ich bin ein small business. No wonder politicians want to get on their good side.
All of this takes us to President Obama’s call for Congress to extend the Bush tax cuts for families with incomes below $250,000 a year. Most people, the president said, believe it is wrong to “raise taxes on middle-class families.” It was certainly a triumphant moment for the administration’s economic policies. In 2008, who among us could have hoped that four years in the future, middle-class Americans would be making $250,000 a year?
But Romney called the idea “a massive tax increase on job creators and on small business.” He also denounced it as “another kick in the gut to the middle class in America,” thus signaling his determination to broaden the American middle even further, as well as to call everything the president does a “kick in the gut” for the rest of this campaign season.
How do we feel about this argument, people? We are not talking about business taxes, in the normal sense of the word. If we were, it would quickly become so incredibly confusing that you would be begging me to go back to the matter of the dog Romney once tied to the roof of his car.
The typical American business owner does not pay corporate taxes. He or she subtracts expenses from revenues and declares the bottom line as income. There are many, many advantages to this approach. You can avoid corporate tax rates, and it’s a lot easier to deduct things. If you’re a baker of gourmet cupcakes, you can subtract the entire cost of your new $50,000 ovens from your income, right up front, as well as lunch with your best friend who is also an occasional cupcake purchaser.
“There are rules, of course, but both the rules and the implementation of the rules are fuzzy,” said William Gale, the co-director of the Tax Policy Center.
And everybody can get into the game! Including partners in hedge funds and law firms and investment banks. “Here’s the beauty — each of the hedge fund principals themselves is a small business,” said Gene Sperling, director of the National Economic Council. Sperling is a small business himself because he gets occasional royalty payments for co-writing a few episodes of “The West Wing.”
This flight to small is so popular that the Congressional Research Service concluded that if taxes on high incomes went up, it would actually create more small businesses because more rich people would want to “seek self-employment because the opportunities for tax evasion and avoidance are greater.”
Small business growth. It’s what makes America great.
When the Republicans claimed that capping the Bush tax cuts at $250,000 would hurt small businesses, the Obama administration quickly retorted that only about 3 percent of the small business owners have incomes above $250,000.
Yeah, said the Republicans, but that little slice still represents more than 900,000 people, and half of all the nation’s business income.
Yeah, said the Democrats, but that’s because of the hedge fund managers and law partners and movie stars with rental property.
Yeah, said the Republicans, but the high-end sort-of-small businesses will still cut back on jobs or investment if their taxes go up. Taxes rise, bad things happen. It’s an article of faith. The Hartford Financial Group said it did a survey that showed just that, although as Robb Mandelbaum pointed out in The Times, only 2 percent of the small businesses surveyed actually cited taxes as their prime concern.
We do know these things: Republicans do not like income taxes, even for very wealthy people. Possibly particularly for very wealthy people. Barack Obama, who also has royalty income, is a small business. Possibly the only small business the Republicans do not love.
By: Gail Collins, Op-Ed Columnist, The New York Times, July 11, 2012
July 13, 2012
Posted by raemd95 |
Election 2012 | Bush Tax Cuts, GOP, Middle Class, Mitt Romney, Politics, Republicans, Small Business, Small Business Administration, Tax cuts |
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His opponents and the press are turning up the heat and even one of his big-name supporters has publicly called on him to give in, but Mitt Romney is adamantly refusing to release new information about his taxes.
If this story line sounds familiar, it should: Romney was in a very similar spot six months ago, and it didn’t take him long to fold.
It was back in January that Romney tried to duck calls to release tax records, believing he could run out the clock at least until he’d secured the Republican nomination. But his personal finances were becoming an issue, with Newt Gingrich and Rick Perry depicting him as a “vulture capitalist” and stoking resentment among working-class Republicans, and his opponents suggested that Romney might be concealing embarrassing and politically damaging information.
“Listen,” Perry said in a debate just before the South Carolina primary, “here’s the real issue for us as Republicans: We cannot fire our nominee in September. We need to know now.”
Perry didn’t survive South Carolina, but when Romney was trounced by Gingrich, the pressure to release his taxes grew. In a debate, Romney was confronted with the example of his own father, who had released 12 years of returns in the run-up to his own 1968 presidential bid, explaining at the time that “one year could be a fluke.” Asked if he’d follow his father’s lead, Romney was evasive, prompting loud jeers and taunts from the live audience. The tax story was taking on a life of its own; even Chris Christie, one of Romney’s top primary season supporters, piped up to say that the candidate should produce his returns.
Finally, a week before Florida’s Jan. 31 primary, Romney gave in, releasing his 2010 returns and an estimate for 2011. It wasn’t nearly as comprehensive as what his father did, but it was something – and it became readily apparent why he’d been so reluctant. Among other things, the records showed that Romney had made $45 million in income over the past two years, even though he wasn’t actually working, and that his effective tax rate for 2010 had been just 13.9 percent. Investments in Swiss bank accounts and offshore holdings in the Cayman Islands and Bermuda were also revealed.
There was also the matter of speaking fees. Before releasing his returns, Romney had hinted that he paid a low effective tax rate, explaining that most of his income over the last 10 years had come from investments (which are subject to a 15 percent tax rate) and noting that “I get speakers fees from time to time, but not very much.” But it turned out he’d actually taken in $347,327.62 in speaking money from February 2010 to February 2011 alone, making the episode another “wealth gaffe” for Romney.
This wasn’t enough to stop Romney from winning his party’s nomination. His main competition came from Gingrich and Rick Santorum, so it would have taken a lot more to sink him. But it suggests a similar cave-in may be just around the corner now, with Romney’s taxes once again becoming a major issue.
The impetus this time is a series of media reports examining Romney’s complicated personal finances and raising questions about how much money he has parked offshore, and why. The Obama campaign has taken the new reporting and run with it, demanding that Romney release multiple years of tax records (and taunting him with the example of his own father). The official Romney line, of course, is that there’s nothing to see here and that he’s already provided ample disclosure, but not every Republican is reading from the same script. On Sunday, for instance, Haley Barbour said he’d release more information if he were in Romney’s shoes.
It’s hard to believe there’s anything in Romney’s tax history as sinister as some Democrats are suggesting. But it’s also hard to believe that if Romney were to release records for more years they wouldn’t feature the same sort of embarrassing revelations found in his 2010 return. Obviously, this is something his campaign would like to avoid. But as the story of Romney’s refusal gains traction, the Romney team may be faced with a new calculation: Is there more harm in looking like you’re hiding something than in just putting the information out there, suffering through a news cycle or two, and moving on?
Actually, in a way, there may be no harm at all for Romney in releasing more tax records. The Obama team already has all the material it needs to paint him as the Swiss bank account guy. At least this way, they won’t be able to say he’s the Swiss bank account guy who’s hiding something.
By: Steve Kornacki, Salon, July 11, 2012
July 12, 2012
Posted by raemd95 |
Election 2012 | Bermuda, Cayman Islands, media, Middle Class, MittRomney, Politics, Republicans, Swiss Bank Accounts, Tax Returns |
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