Almost all federal taxpayers who itemize their charitable deductions on their returns deduct the full amount, in order to keep their tax burden as low as possible. Mitt Romney didn’t do that in 2011, according to tax returns released today, leaving $1.8 million un-deducted so he could tell voters he paid a federal tax rate of at least 13 percent. That’s a luxury reserved only for wealthy politicians who can afford to pay an extra few hundred thousand for image purposes.
But one unfortunate line on a memo from Mr. Romney’s lawyer, accompanying the tax returns, suggests that Mr. Romney really doesn’t see much difference between giving to charity and giving to the government.
“Over the entire 20-year period, the total federal and state taxes owed plus the total charitable donations deducted represented 38.49% of total AGI,” the memo said, referring to Mr. Romney’s adjusted gross income. In his mind, apparently, you can just add up the two figures into a new hybrid column, perhaps called, Total Obligation to Society, and make yourself look even more generous.
It doesn’t work that way, however; charity and taxes cannot be conflated to make it sound like you are “giving away” a larger portion of your income than you are. Conservatives can hate paying taxes, and Mr. Romney in particular appears to hate having tax money spent on the “dependent class,” but that doesn’t make the government a charity.
Taxes represent the obligations citizens have to each other and to society, fostering physical safety with defense and law enforcement spending, economic safety with public works, and personal welfare for the needy. Charity is entirely voluntary, even for those who, like Mr. Romney, are asked by their religious authorities to tithe a fixed portion of their income. Those donations play a vital role in every American community, but they can never take the place of a firm government safety net, as much as they are preferred by the right to taxes.
One would think that someone running to be the government’s chief executive would be proud to make tax payments, and would not try to reduce them through exotic foreign tax shelters and an outsized IRA, as Mr. Romney has done for years. But the announcement today that he had deliberately “overpaid” his taxes was grudging and entirely for show. He overpaid them only so that he couldn’t be accused of paying far less before the election.
Despite his accountant’s statement today that he had never paid less than 13.66 percent of his income in taxes over the last 20 years (a level that would make many middle-class taxpayers jealous), it is still an assertion that has not been backed up by the release of actual tax returns for that period. For all the highly trumpeted discretionary donations he has made, Mr. Romney apparently still doesn’t want the public to see how assiduously he has worked to lower his most important social obligation.
By: David Firestone, The New York Times, September 21, 2012
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September 23, 2012
Posted by raemd95 |
Election 2012 | Charitable Deductions, Government, Income Taxes, Mitt Romney, Politics, Republicans, Social Safety Nets, Tax Rates, Tax Returns |
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Mitt Romney likes to say that this election is a battle for “the soul of America.” He’s right — just not in the way that he thinks.
Romney asserts that President Obama wants to “fundamentally transform America,” turning the country “into a European-style entitlement society.” In fact, Romney and his Republican presidential rivals have a far more radical transformation in mind. They envision a dramatically shrunken federal government and a dangerously unraveled social safety net.
Theirs is not the self-styled compassionate conservatism of a George W. Bush. “It is compassionate to actively help our fellow citizens in need,” Bush said in 2002. “It is conservative to insist on responsibility and results.”
A decade and a Tea Party later, active help — at least active help from the federal government — is out of Republican fashion. Of course Republicans have traditionally favored state over federal involvement, but the degree of proposed retrenchment during the current campaign is remarkable — and troubling.
Consider Romney’s answer to a question at the last debate about the safety net in an age of austerity:
“Well, what we don’t need is to have a federal government saying we’re going to solve all the problems of poverty across the entire country, because what it means to be poor in Massachusetts is different than Montana and Mississippi and other places in the country,” Romney said.
“And that’s why these programs, all these federal programs that are bundled to help people and make sure we have a safety net, need to be brought together and sent back to the states. And let states that are closest to the needs of their own people craft the programs that are able to deal with the needs of those folks.”
Romney went on to tick off specific programs: food stamps, housing vouchers, Medicaid, emergency heating assistance.
“What unfortunately happens is, with all the multiplicity of federal programs, you have massive overhead with government bureaucrats in Washington administering all these programs. Very little of the money that’s actually needed by those that really need help, those that can’t care for themselves, actually reaches them,” Romney added.
Nice talking point, if it were true. As the Center for Budget and Policy Priorities has demonstrated, the major programs for the poor are extraordinarily efficient, even taking into account state as well as federal administrative costs. In 2010, 96.2 percent of Medicaid spending went for care; 94.6 percent of food stamp spending went for food; and 90.9 percent of housing program dollars went to rental assistance for low-income tenants.
Even for the man who ran Bain Capital, that shouldn’t seem like massive overhead.
The more important point is the degree to which Romney & Co.’s back-to-the-states approach would shred protections for the most vulnerable Americans. Romney’s observation about the differences between being poor in Massachusetts and Mississippi underscores the importance of a national safety net. Mississippi has more needs, and less money, than does Massachusetts.
Indeed, it was Richard Nixon who, reacting to reports about pockets of deep poverty and hunger in a wealthy nation, instituted a guaranteed federal minimum income for the elderly and disabled (Supplemental Security Income, or SSI) and set national eligibility levels for food stamps.
Imagine what would have happened during the recession if, say, food stamps — now known as SNAP (Supplemental Nutrition Assistance Program) — were a fixed block grant to states, as Romney envisions. Needs rose dramatically, but states, already strapped for cash, would not have been able to meet them.
Romney, the former Massachusetts governor, understands the importance of the federal role — or once did. His observations about the need to return control to states came in the context of a discussion about the Low Income Home Energy Assistance Program (LIHEAP).
Yet Gov. Romney, in 2003, called on Congress to “support the highest possible funding,” adding, “We need to get the funds to those who need help the most to stay safe and warm this winter.”
Indeed, one of Romney’s leading supporters in New Hampshire, Republican Sen. Kelly Ayotte, is lobbying for more LIHEAP money — funding, by the way, that the president proposed cutting, and that already comes in the form of a block grant to states that decide how to use it.
“It’s an important safety net,” Ayotte told Newsweek. “I’m not against having a safety net for those who are most in need.”
Is Romney? Are his rivals? Because the impact of their plans would be to shred the safety net. Making sure that doesn’t happen is the real battle for America’s soul.
By: Ruth Marcus, Opinion Writer, The Washington Post, January 12, 2012
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January 15, 2012
Posted by raemd95 |
Election 2012 | Kelly Ayotte, Mitt Romney, Politics, Poverty, Republicans, SNAP, Social Safety Nets, Teaparty |
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House Speaker John Boehner’s new budget proposal would require deep cuts in the years immediately ahead in Social Security and Medicare benefits for current retirees, the repeal of health reform’s coverage expansions, or wholesale evisceration of basic assistance programs for vulnerable Americans.
The plan is, thus, tantamount to a form of “class warfare.” If enacted, it could well produce the greatest increase in poverty and hardship produced by any law in modern U.S. history.
This may sound hyperbolic, but it is not. The mathematics are inexorable.
The Boehner plan calls for large cuts in discretionary programs of $1.2 trillion over the next ten years, and it then requires additional cuts that are large enough to produce another $1.8 trillion in savings to be enacted by the end of the year as a condition for raising the debt ceiling again at that time.
The Boehner plan contains no tax increases. The entire $1.8 trillion would come from budget cuts.
Because the first round of cuts will hit discretionary programs hard — through austere discretionary caps that Congress will struggle to meet — discretionary cuts will largely or entirely be off the table when it comes to achieving the further $1.8 trillion in budget reductions.
As a result, virtually all of that $1.8 trillion would come from entitlement programs. They would have to be cut more than $1.5 trillion in order to produce sufficient interest savings to achieve $1.8 trillion in total savings.
To secure $1.5 trillion in entitlement savings over the next ten years would require draconian policy changes. Policymakers would essentially have three choices: 1) cut Social Security and Medicare benefits heavily for current retirees, something that all budget plans from both parties (including House Budget Committee Chairman Paul Ryan’s plan) have ruled out; 2) repeal the Affordable Care Act’s coverage expansions while retaining its measures that cut Medicare payments and raise tax revenues, even though Republicans seek to repeal many of those measures as well; or 3) eviscerate the safety net for low-income children, parents, senior citizens, and people with disabilities. There is no other plausible way to get $1.5 trillion in entitlement cuts in the next ten years.
The evidence for this conclusion is abundant.
The “Gang of Six” plan, with its very tough and controversial entitlement cuts, contains total entitlement reductions of $640 to $760 billion over the next ten years not counting Social Security, and $755 billion to $875 billion including Social Security. (That’s before netting out $300 billion in entitlement costs that the plan includes for a permanent fix to the scheduled cuts in Medicare physician payments that Congress regularly cancels; with these costs netted out, the Gang of Six entitlement savings come to $455 to $575 billion.)
The budget deal between President Obama and Speaker Boehner that fell apart last Friday, which included cuts in Social Security cost-of-living adjustments and Medicare benefits as well as an increase in the Medicare eligibility age, contained total entitlement cuts of $650 billion (under the last Obama offer) to $700 billion (under the last Boehner offer).
The Ryan budget that the House passed in April contained no savings in Social Security over the next ten years and $279 billion in Medicare cuts.
To be sure, the House-passed Ryan budget included much larger overall entitlement cuts over the next 10 years. But that was largely because it eviscerated the safety net and repealed health reform’s coverage expansions. The Ryan plan included cuts in Medicaid and health reform of a remarkable $2.2 trillion, from severely slashing Medicaid and killing health reform’s coverage expansions. The Ryan plan also included stunning cuts of $127 billion in the SNAP program (formerly known as food stamps) and $126 billion in Pell Grants and other student financial assistance.
That House Republicans would likely seek to reach the Boehner budget’s $1.8 trillion target in substantial part by cutting programs for the poorest and most vulnerable Americans is given strong credence by the “Cut, Cap, and Balance” bill that the House recently approved. That bill would establish global spending caps and enforce them with across-the-board budget cuts —exempting Medicare and Social Security from the across-the-board cuts while subjecting programs for the poor to the across-the-board axe.
This would turn a quarter century of bipartisan budget legislation on its head; starting with the 1985 Gramm-Rudman-Hollings law, all federal laws of the last 26 years that have set budget targets enforced by across-the-board cuts have exempted the core assistance programs for the poor from those cuts while including Medicare among programs subject to the cuts. This component of the “Cut, Cap, and Balance” bill strongly suggests that, especially in the face of an approaching election, House Republicans looking for entitlement cuts would heavily target means-tested programs for people of lesser means (and less political power).
In short, the Boehner plan would force policymakers to choose among cutting the incomes and health benefits of ordinary retirees, repealing the guts of health reform and leaving an estimated 34 million more Americans uninsured, and savaging the safety net for the poor. It would do so even as it shielded all tax breaks, including the many lucrative tax breaks for the wealthiest and most powerful individuals and corporations.
President Obama has said that, while we must reduce looming deficits, we must take a balanced approach. The Boehner proposal badly fails this test of basic decency. The President should veto the bill if it reaches his desk. Congress should find a fairer, more decent way to avoid a default.
By: Robert Greenstein, President, Center on Budget and Policy Priorities, July 25, 2011
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July 25, 2011
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While big business whimpers about high statutory tax rates, the effective tax rate paid by most corporations in America is often far lower than most other developed nations (thanks to loopholes and accounting tricks). Meanwhile, corporate tax receipts accounted for 30 percent of US federal revenues in the mid-1950s. In 2009, they made up just 6.6 percent of federal revenue streams.
In other words, not only are big corporations funding a smaller percentage of our shared social safety net, they’re paying a smaller percentage into funding the future infrastructure that they desperately need.
Imagine if big business got its way and corporate taxes were slashed even further. How would businesses suffer?
What would Oprah and Henry Ford have done?
Imagine if, when Henry Ford wanted to start the Ford Motor Company, he had to not only drill for oil himself but also oversee the laying of pipelines and production infrastructure across government-owned land so his cars could have gas to make them go. And when the American auto industry was expanding in the 1940s and 50s creating jobs throughout the nation, imagine if Chrysler and General Motors had to not only build their own factories and assembly lines but actually plan and construct the roads and interstate highways for cars to drive on.
Imagine if Oprah had to regulate the television spectrum for herself and that at random, bandwidth pirates could intrude on broadcasts of the Oprah Winfrey Show because there was no Federal Communications Commission monitoring ownership of and access to the public airwaves.
Imagine if every restaurateur today had to invest in his or her own food safety teams to make sure the meat served isn’t toxic. Imagine if every small business in remote rural communities had to generate its own electricity on site because the government wouldn’t have helped fund the expansion of power lines to those distant places. Imagine if every corporation had to educate its entire workforce from childhood to adulthood because there were no public schools.
Bill Gates would have had to run phone lines.
What if, when Alexander Graham Bell invented the telephone, he couldn’t get a patent from the United States government to protect his idea? Or for that matter, if there had been no laws to protect private property and no law enforcement, Bell might have had to sit up all night with a gun guarding his invention – instead of going out in the world and figuring out how to use it. When Bill Gates wanted to start Microsoft, consider if instead of drawing on the government-created infrastructure of the original Internet (which he accessed early on in high school through the publicly funded University of Washington), Mr. Gates not only had to invent Windows, but also invent the entire World Wide Web and run the wiring for the phone lines that originally connected all his potential consumers.
When Warren Buffet launched his investing career that ultimately earned him billions, imagine if in addition to hiring lawyers to run his business, Mr. Buffett had to hire judges, too, and create entire court systems to oversee and enforce the types of binding contracts on which the stock market relies. For that matter, imagine if Buffet had to print his own currency and negotiate its value against the currencies of all other individual investors.e infrastructure of private sector success
Taxes fund the infrastructure of private sector success
Businesses in the United States don’t succeed in spite of our government, in many ways, they succeed because of our government. Through our taxes, we fund the legal and economic infrastructure of private sector success. By definition, those businesses that get the most out of that infrastructure are those that should give the most back.
At a time when economic conservatives want to slash spending that helps the poor and middle class rather than raise the already-low effective taxes of big business, it’s shameful that corporations like General Electric and Bank of America effectively pay no taxes. In the context of the larger American story, where successful businesses of today support the public infrastructure for the businesses of tomorrow, saying that corporations should pay even less is downright un-American.
By: Sally Kohn, AlterNet, July 22, 2011
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July 24, 2011
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For days, the White House has infuriated its Democratic allies in Congress by offering House Republicans more and more in exchange for a deal to raise the debt ceiling and prevent default. But it was never enough, and, on Friday evening, it became clear that it may never be enough. Speaker John Boehner again walked away from the “grand bargain” he had been negotiating with President Obama, leaving the country teetering on the brink of another economic collapse.
At the White House podium a few minutes later, the president radiated a righteous fury he rarely displays in public, finally placing the blame for this wholly unnecessary crisis squarely where it belongs: on Republicans who will do anything to upend his presidency and dismantle every social program they can find. “Can they say yes to anything?” he asked, noting the paradox of Republicans, who claim that financial responsibility and debt reduction are their biggest priorities, rejecting yet another deal that would have cut that debt by at least $3 trillion.
Mr. Obama, in fact, had already gone much too far in trying to make his deal palatable to House Republicans, offering to cut spending even further than the deficit plan proposed this week by the bipartisan “Gang of Six,” which includes some of the Senate’s most conservative members. The White House was willing to cut $1 trillion in domestic and defense spending and another $650 billion from Medicare, Medicaid and even Social Security.
Much of that savings would have come from raising the eligibility age for Medicare benefits and reducing the cost-of-living increases that elderly people depend on when receiving their health and pension benefits. It could have caused significant damage to some of the nation’s most vulnerable people.
The “bargain” would require that alongside these cuts, tax revenues would go up by $1.2 trillion, largely through a rewrite of the tax code to eliminate many deductions and loopholes. That’s substantially less in revenue than the $2 trillion in the “Gang of Six” plan. The problem is that while much of the cutting would start right away, most of the revenue increases would be put off, in part because a tax-code revision would take months, and in part to allow House Republicans to say they did not agree to any specific tax revenue increases.
Democratic lawmakers were rightly furious when they heard about these details this week, calling the plan wholly unbalanced. But, in the end, it was Mr. Boehner who torpedoed the talks. He said Friday evening that he and the president had come close to agreeing on $800 billion of the revenue increases (the equivalent of letting the upper-income Bush tax cuts expire as scheduled next year — not much of a heavy lift) but could not stomach another $400 billion the White House wanted to raise through ending tax loopholes and deductions.
So, on the eve of economic calamity, the Republicans killed an overly generous deal largely over a paltry $400 billion in deductions. Mr. Obama was willing to take considerable heat from his liberal critics over the deal, and the Republicans were not willing to do a thing to anger their Tea Party base. As the president forcefully said, there is no evidence that House Republicans are capable of making those tough decisions. If last-ditch talks beginning Saturday fail, they will have to take responsibility if the unimaginable — a government default — happens in 10 days and the checks stop going out.
By: The New York Times, Editorial, July 22, 2011
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July 24, 2011
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