“Mitt Digs In Deeper”: Drip-Drip-Drip On Tax Returns Raises A Lot More Questions Than It Answers
I have no idea who is advising Mitt Romney on how to handle questions about his history of paying or not paying taxes. But whoever it is should probably get fired.
Perhaps Harry Reid’s taunts about hearing from a reliable source that Romney stiffed Uncle Sam entirely over the last decade had an impact after all. Otherwise why would he go out of his way to let it be known he paid “no less” than a 13% tax rate during the years for which he is refusing to release his returns?
I mean, 13% is not a high rate for a guy with Mitt’s wealth; certainly nothing approaching the allegedly confiscatory rates the poor job-creators of America are toiling under, making them wonder each and every day if it’s time to Go Gault. And the number raises the rather obvious question: 13% of what? Total income? Adjusted Gross Income? Taxable income? Ezra Klein suggests it may be that last measurement, which may be the only one under which he can claim a double-digit tax burden.
If he intends to gut it out and never release his tax returns, he might be better off just saying “It’s none of your damn business, and if I’d done anything wrong, the IRS would have locked me in leg-irons by now.” This drip-drip-drip of undocumented assertions raises a lot more questions than it answers.
Mitt reminds me of a guy I once knew who was asked in a job interview about his religious practices, which were somewhere between non-existent and hey-I-listen-to-Christmas-music! Instead of admitting that, he kept making excuses to the interviewer (who pretty much thought everyone should be forced to go to church weekly) about his busy schedule and good intentions and so on and so forth. He didn’t get the job, but talked about the interview, and soon gained the nickname of “Digger.” Mitt’s a “digger,” too.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, August 16, 2012
“Ann Romney’s Inconvenient Facts”: Other Than tax Returns, “There’s Nothing We’re Hiding”
As a rule, family members of candidates shouldn’t be considered political players, but once those family members become campaign surrogates and enter the political sphere making partisan arguments, there’s nothing inappropriate about scrutinizing their comments.
Take Ann Romney’s latest defense of her husband’s secrecy, for example.
Ann Romney sat down with NBC’s Natalie Morales and when the subject turned to the still-hidden tax returns, the Republican became quite agitated. Romney insisted that her husband’s campaign has done “what’s legally required of us,” which is true, but fails to meet accepted norms, standards, and expectations.
She added, “There’s going to be no more tax releases given.” I assume that means outside of the 2011 returns Mitt Romney has promised to release, but has not yet disclosed, though Ann Romney didn’t elaborate.
She went on to say, “There’s nothing we’re hiding.” Except the tax returns, the tax rates paid, and the explanation for the Swiss bank account, the shell corporation in Bermuda, and the cash in the Cayman Islands. Other than hiding all of that, they’re not hiding anything.
And why will the Romneys refuse all additional calls for disclosure, even from Republicans? According to Ann Romney, it’s because Democrats might use the materials to make Mitt Romney look bad.
I continue to marvel at this deeply odd argument. As Dahlia Lithwick and Raymond Vasvari recently explained, “[Romney] isn’t actually claiming that his opponents will lie. He’s claiming he’s entitled to hide the truth because it could be used against him…. These are tax returns. Factual documents. No different than, say, a birth certificate. But the GOP’s argument that inconvenient facts can be withheld from public scrutiny simply because they can be used for mean purposes is a radical idea in a democracy.”
And yet, this radical idea is now the Romneys’ only talking point on the issue.
By: Steve Benen, The Maddow Blog, August 15, 2012
“Tax Returns And Now Tax Policy”: Mitt Romney’s Two Front Tax-Withholding
You’d think Mitt Romney’s campaign would be happy about the report this week by the Tax Policy Center—the demands for the former Massachusetts governor to release more of his tax returns have finally been quieted. Of course they’re none too pleased that the obsession with his making public more tax returns has been replaced by calls for him to release more of his tax plans.
Romney’s tax plan contemplates an across the board 20 percent tax cut, among other things. He and his people swear that the plan would be revenue neutral—it would not cause the budget deficit to further balloon—because while he cut rates he would also close loopholes. Which ones? He has pointedly not said, and scoffed whenever any independent groups tried to run the numbers to figure out how his plan would work. “It can’t be scored because those kind of details have to be worked out with Congress and we have a wide array of options,” he told CNBC in March. How could he be sure that his tax plan is revenue neutral if the details haven’t been worked out yet? You’ll just have to trust him on this.
But the new Tax Policy Center blows this argument out of the water—they ran the numbers and figured out that no matter which numbers Romney plugs in (even magical, supply-side, dynamic scoring numbers), there aren’t enough loopholes to close to pay for the tax cuts. The result would be what the New York Times’s Paul Krugman calls Dooh Nibor—reverse Robin Hood economics: Rob from the middle class to pay the wealthy.
Romney’s team has flailed around trying to discredit the Tax Policy Center, calling the group’s credibility into question (though Romney-cons cited it as authoritative earlier in the campaign) and arguing that it doesn’t take into account the special economic growth mojo of tax cuts (it in fact does). Here’s what they haven’t done: release the missing details that make his plan add up. Maybe that’s because they haven’t worked out the details yet (so how do you know the numbers will add up?). Or maybe it’s because the details involve numbers of Romney’s own invention which defy the ordinary laws of arithmetic and exist at a frequency which can only be heard by dogs traveling down the highway at high speeds while strapped to the roofs of cars. That would actually answer a few questions.
Romney’s two front tax-withholding—not giving an inch more on his tax returns or his tax plans—reminds me of the old aphorism attributed to Abraham Lincoln that it’s better to remain silent and be thought a fool than to speak and remove all doubt. It seems like the Romney campaign is updating and adapting the sentiment for modern politics. They’re testing whether it’s better to be silent and thought to be hiding something damaging than to fully disclose and remove all doubt.
By: Robert Schlesinger, U. S. News and World Report, Washington Whispers, August 3, 2012
“Mystical Economic Pixie Dust”: The Tax Trap Springs Shut On Romney
It’s all too easy to hyperventilate about the importance of this or that campaign development in an electorate where swing voters are few and pay little attention to the news, but Mitt Romney appears to have blundered his way into a bona fide political disaster with his tax plan. Republican policy elites and fund-raisers fervently believe, for both moral and economic reasons, in the paramount necessity of cutting taxes for the rich. This position is, however, a political trap; the vast majority of Americans want taxes on the rich to be higher, not lower, and the commitment to cutting taxes on the rich further requires larger entitlement cuts or higher middle class taxes, both of which are more unpopular still.
At the outset of his campaign, Romney tried to avoid committing himself, but by February, with GOP rivals outflanking him and facing steady pressure from Republican elites, he declared himself in favor of a 20 percent tax cut, a move greeted with joy from anti-tax activists. But he still attempted to hide the ball. Romney promised that his rate cut would be matched by closing tax deductions and some unspecified allowance for economic growth, and thus would not decrease the level (or the share) of taxes paid by the rich. Romney’s boast that his plan could not be scored revealed the essential calculation. But the campaign miscalculated. Yesterday’s study by the Brookings Institution and the Tax Policy Center showed that, even allowing for the faster growth predicted by Romney’s own economist, there aren’t enough tax deductions to account for the cost of the lower rates for the rich — raising taxes for the middle class would be the only way to make Romney’s promises add up. Romney didn’t hide the ball well enough.
Obama has already unleashed an ad making the simple and devastating point that Romney is proposing to cut taxes of people like himself and raise them on the vast majority of the public: http://youtu.be/r1D1jI61ckY
Romney’s play here is to turn the study’s findings into a matter of partisan dispute. It has mustered two arguments. The first is that the Brookings study cannot be trusted because its authors are biased. (Romney adviser Eric Fehrnstrom called the study a “joke.”) The Weekly Standard pushes this line, noting that one of its authors visited the White House twelve times. Unfortunately, Romney’s campaign itself once cited the Tax Policy Center (accurately) as “objective,” and its findings are basically simple math.
Romney’s second argument is more convoluted. The study examined the effects of Romney’s income tax proposals. He has also promised to reform the corporate tax code. Romney policy advisor Lanhee Chen argued yesterday that Romney corporate tax reforms could increase economic growth even more. So, even though the study allowed for optimistic growth assumptions of the income tax cuts, it didn’t also allow for optimistic assumptions of the corporate tax cuts.
Of course, Romney doesn’t really have a corporate tax reform plan. He says basically the same thing everybody says. The corporate tax code is filled with deductions and loopholes. The statutory rate (35 percent) is unusually high by international standards, but the effective rate is unusually low. We could lower the rate to, say, 28 percent, close a bunch of deductions and loopholes, and have a fairer tax code. That’s what Romney endorses, and it’s also what Obama endorses.
But the whole trick here is assembling an actual legislative coalition to pass a tax reform plan. The whole problem is that companies that benefit from loopholes and deductions lobby to keep them. Romney isn’t offering a policy blueprint for what deductions he would take away, let alone a plausible scenario to pass such a plan even if it did exist. He’s just using the mystical economic pixie dust of the nonexistent corporate tax reform plan in order to hold out the hope of some missing ingredient, some unmeasurable X factor, to keep his proposal in the safe dreamworld where the cruel tyranny of math cannot apply.
But the math is inescapable. When Romney looks back at the positions he adopted during the Republican primary — the hard line on immigration, the embrace of Paul Ryan — his pander to supply-siders may loom as his largest mistake.
By: Jonathan Chait, Daily Intel, August 2, 2012
“Implausible Assumptions”: Mitt Romney’s Tax Promises Are Mathematically Impossible
The sub-campaign to define Mitt Romney’s tenure at Bain Capital, as I never tire of pointing out, is merely about softening up the Republican nominee for the major fight of the campaign: Obama’s charge that his economic program is merely a retread of the Bush-era program of tax cuts for the rich. Over several months, Romney has laid the groundwork for his own defense. He has promised that his tax plan will not cut taxes for the rich (below the levels established under Bush). Recall that Romney’s old campaign line about how he wasn’t concerned about the very poor was also packaged with a supposedly parallel line about not being concerned about the very rich — neither group would receive any particular targeted benefit from his program.
Romney’s plan has been to hold together these promises by shrouding his tax and budget plans in a veil of secrecy. Romney has promised to reduce tax rates across the board by 20 percent, which would offer huge tax cuts for the rich. But he has promised to close unspecified deductions in the tax code so as to offset the cost, and leave the rich paying the same effective tax rate. Indeed, Romney has boasted about his strategy, noting that its lack of detail means it “can’t be scored,” and thus Obama can’t prove that his plan really would cut taxes for the rich.
But oh yes, he can.
The Brookings Institution and the Tax Policy Center today released a study of Romney’s proposals, insofar as they are known. The finding was simple. Romney’s promises, it found, are mathematically impossible. The amount of revenue available from tax deductions for the rich is smaller than the amount of revenue lost by cutting tax rates for the rich. Even if Romney sincerely scoured the tax code and wiped out every last tax break for the rich that he hasn’t promised to preserve (he has promised to keep in place tax incentives for saving, like the capital gains tax break), the rich will pay lower rates and a lower share of the tax burden.
It’s worth noting that the study embraces implausibly friendly assumptions as to how Romney would go about this. It assumes he would ruthlessly purge the tax code of breaks for the rich, even highly popular ones like the charitable deduction. It further assumes that, in order to wring every last penny out of the rich, Romney would cut off all deductions immediately for every dollar in income over $200,000 a year. (In reality, nobody would create a tax code that meant going from $200,000 a year to $200,001 would jack up your taxes by thousands of dollars — you would ramp up the tax deduction phase-in, which would reduce taxes for the rich even more. But the paper bends over backwards to grant Romney this implausible assumption.)
What’s more, the paper assumes that Romney’s plan would increase economic growth, meaning it wouldn’t have to find dollar-for-dollar replacements for all its lost income. To measure this cheerful scenario, the paper adopts a model created by Greg Mankiw — who is, of course, a Bush administration veteran and one of Romney’s main economic advisers.
Piling implausibly optimistic assumption upon implausibly optimistic assumption, the paper nonetheless concludes that Romney will cut taxes for the rich. That means it would result in some combination of higher taxes for the middle class or higher deficits. If you take Romney at his word that he would hold tax revenue steady at its current levels, then he would be implementing a significant shift in the tax burden from the rich to the middle class. 95% of all taxpayers would pay more taxes, in order to finance a tax cut for the most affluent.
And remember, this is assuming the most favorable possible case for Romney. Under more realistic assumptions — that he won’t close every single penny in tax deductions benefitting the rich, and that his plan won’t spur economic growth to the degree a Republican like Mankiw hopes it would — then the transfer from the non-rich to the rich would be even higher. All of which shows why, despite the constant drumbeat of conservative pleas for him to unveil more policy specifics, Romney is going to keep his proposals as vague as possible.
By: Jonathan Chait, Daily Intel, August 1, 2012
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