Monthly Archives: September 2012

Romney’s taxes and (almost) everybody else’s

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Which tax loopholes would Romney want to cut?

‘Loophole’ is an elastic term, defined adequately for now by the free dictionary:

“A way of escaping a difficulty, especially an omission or ambiguity in the wording of a contract or law that provides a means of evading compliance.”

Broadly defined, tax loopholes are legal ways to escape paying taxes.

Easy question: What tax loopholes right now do wealthiest individuals benefit from most?

 

Mortgage interest deduction

Quick answer:

Wealthy individuals receiving income from capital gains, including hedge fund managers, get their income taxed at the capital gains rate, i.e. a top rate of 15 percent. For some reason, buying and selling assets for money is not income the way working for money is. From a public policy standpoint, this means that some of the powers that be consider buying and selling assets more difficult than, say, laying a railroad. Or else they consider the former more socially productive–even after the mortgage-derivatives meltdown.

 

Capital gains tax and wealth

Bringing this tax issue swiftly down to the current presidential race, President Obama has supported changing this policy. There is effectively zero chance that GOP nominee Mitt Romney will support such a change. As previously written, Romney has used the capital gains advantage to great benefit in his own tax returns, and makes no bones about it. Romney’s 14 percent tax rate for 2011–voluntarily higher than it had to be, at that, and maybe temporary–has been widely reported.

Candidate Romney has been vague, to put it nicely, on what tax loopholes he would close. But this helpful article by one of the rightists at The New Republic provides a list of convenient targets. In all probability, a President Romney would look here first. First, note that almost all of these provisions–nine out of ten–benefit individuals rather than corporations (which are “people, my friends”). Furthermore, almost all of them benefit the middle class, people of ordinary wealth, income and assets.

Drum roll, please. Here are some of the top tax ‘loopholes’ in descending order of effectiveness, i.e. in taxes from the middle class lost, so to speak, to the Treasury. Reading each of these knots in the rope for the middle class, ask yourself one key question: Is there any realistic possibility that a President Romney and a Republican Congress would not target it for elimination? Note: If not, why not?

  • Employer contributions for employee health insurance/health care are excluded. Can you see a Romney-Ryan administration not trying to tax these?
  • The home mortgage interest deduction. The GOP platform coming out of the Republican National Convention left this one wide open.
  • Step-up basis of capital gains at death. With all the Republican hue and cry about inheritance taxes as a ‘death tax’, this one may be safe. Currently, capital gains on assets held at the owner’s death are not subject to capital gains tax, regardless of your income. The assets are valued at market on the date of death, again regardless of your income. Here, look out for state or county ‘recording fees’, and bank administrative fees, etc., that regressively burden a small inheritance more than a large estate. Not that one should be over-confident. Reps like Eric Cantor and Paul Ryan are entirely capable of finding additional federal ways to limit the benefit of the step-up for middle-income heirs.
  • 401(k) plans. Really. Seriously. Can you imagine a Romney-Ryan administration boosting, leaving in place or in any way supporting private pension arrangements that might benefit a large number of middle-class workers or retirees?
  • Imputed rental income is excluded. Creates an advantage for owning over renting, thus creates an advantage for stability and greater economic security for middle-class voters. Is there a realistic chance that this one would not be a target?
  • State and local taxes are deducted. Romney himself benefited heftily from this deduction, according to his 2011 IRS filing.
  • Accelerated depreciation of machinery and equipment. Can benefit most the business persons who need it most. See the bull’s-eye?
  • Capital gains. Well, there’s one in every bunch.
  • Deduction for charitable contributions. They’ve already started going after this one, so they can hardly claim they won’t be trying further. Admittedly many wealthy individuals benefit from this deduction–but so do the causes to which they donate, including House of Ruth, Disabled Veterans of America, and countless food banks.
  • Exclusions for employer contributions to employee pension plans. See the first and fourth items, above.

 

The TNR author has a valid point that many, many dollars in tax ‘loopholes’ benefit individuals in the big middle of the U.S. economy. Another way of looking at the same topic–rather than suggesting 90 percent of the population as a giant larder to be raided by the one-percenters–would see most of these exclusions and deductions as reasonable ways to shore up individuals throughout all ranks of society. Thus it would seem to be a key question for campaign 2012: Which tax loopholes, Governor Romney, would you close? Maybe that question will be asked in one of the debates. It has not been effectively posed by the national political press so far, at least not effectively enough to get a clear answer.

Meanwhile, along with the big-ticket items above that allow the middle class to survive, there are some intriguing smaller items benefiting a far smaller cohort.

See for example this piece from Andrew Sorkin, from 2011. As the author points out, an oddity of the tax code benefits day traders and speculators who buy and sell futures contracts–even in comparison with traders in stocks or mutual funds.

“For years, futures contracts, which are essentially bets on the price of commodities, stock indexes and the like, have received a more favorable tax treatment than stocks. A trader who buys and sells an oil contract in less than a year—even in a matter of minutes—pays no more than a 23 percent tax on the profits.

Compare that with the bill for flipping shares of Google, General Electric or even a diversified mutual fund in the same time period. Those short-term investment gains are treated like ordinary income, meaning the rate can run as high as 35 percent.”

The biggest beneficiaries, Sorkin continues, “seem to be day traders and speculators.  Long-term investors account for only 20 percent of the activity in the commodities future market, according to a report published last week by the Commodity Futures Trading Commission, the industry regulator.”

Incidentally, the fact that short-term gains can be taxed at a higher rate also means that a short-term (paper) loss can be a significant write-off. As previously written, Mitt Romney has taken full advantage of this one, too.

More in the Romney tax returns

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More on those tax returns

Following up on those Friday-release Romney tax returns, a few quick observations

Mitt and Ann Romney’s IRS tax return for 2011 is posted here.

For the record, what has not been revealed by Romney is more interesting than what has been. Still, there are some items of interest in the limited and partial two-year disclosure the Romney team has vouchsafed.

From the top:

The headliner, of course, is the large amount of money involved.

Total adjusted gross income reported:   $13,696,951.

Largest single income source is from capital gains:            $6,810,176.

Next largest income source is dividends:                               $3,649,567.

Next largest income source is interest, including as previously written U.S. government interest:              $3,012,775.

The next thing one notes is the meticulous craftsmanship of Romney’s tax preparers, PriceWaterhouseCoopers.

PriceWaterhouseCoopers

The meticulousness is noticeable in regard to whatever reduces Romney’s tax liability. Pages to indicate losses, expenses and deductions are filled out copiously. Numerous tax credits are claimed, large and small. Two dollars ($2) in tax credits is claimed for example under Part III, General Business Credits or Eligible Small Business Credits, for “Increasing research activities (form 6765)”. Box checked: “General Business Credit From a Passive Activity.” Another twenty-five dollars ($25) for increasing research is claimed on another page, indicating a different pass-through entity.

Capital gains seem also to be meticulously included. For example, a $39 gain is declared for “Casualty or Theft of Property Held More Than One Year.” Cryptic.

Capital losses, on the other hand, apparently total $484,913.

Note:

‘Capital loss’ seems to wiggle up or down a little, depending on which page you’re on. This is probably the key on how Romney in person addresses questions, audiences, and fora on the campaign trail. Other people are thinking in terms of ‘flip-flopping’ or issues or the like. Romney is thinking in terms of long-term gain/loss.

Romney on air

Speaking of losses and write-offs, our tax code offers among numerous other deductions an Investment Interest Expense Deduction. This deduction might well have been intended to encourage investment in, say, factories and equipment. But evidently it can also be applied to capital-gains-type ‘investment’, such as in pass-through entities in the Caymans, Germany, and Ireland.

Romney’s net investment income reported:       $2,403,311.

Investment interest expense reported:                $640,876.

His deduction:   Ditto.

So just managing the investment income costs that? Or the part of the managing expenses that can be deducted?

On another matter, the Household Employment Tax and Social Security pages are left blank. Instead, a statement: “Beginning in 2011, the payroll tax returns and all applicable taxes for personal employees were remitted on a monthly basis and reported quarterly on Form 941.” Form 941 is not included in the releases. Protecting employees’ privacy is a good. The omissions leave PriceWaterhouseCoopers on the hook for seeing to it that there’s no funny business about employees’ Social Security.

Can, meet worms.

  • Chris Hayes on MSNBC has already pointed out that the trustee named on Romney’s blind trusts is also Romney’s own attorney. Here is the posted statement from Romney’s guy.
  • As stated, Romney actually chose to pay more taxes than he had to for 2011, by claiming less in charitable contributions than the handsome amount he gave. This filing decision was made, according to Romney’s guys, in order to make Romney’s taxes conform to his previous (July) statement on his usual tax rate.
  • Tax expert David Cay Johnston has also pointed out the careful wording in this statement, particularly re ‘owed’ versus ‘paid’. Nowhere does Romney’s statement on his taxes claim that Romney paid what he owed in the given tax year.
  • Numerous commentators have also noted that this year, for example, Romney can if he chooses go back and file an amended return, i.e. after the election, and claim the rest of his charitable deductions.

Worms, meet can.

One last sub-topic, in this dry matter of tax returns.

Many, many pages of the Romney tax returns: “Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund” (Form 8621). Romney’s filing is particularly sensitive to the possible impression made by the category of foreign holdings, it would seem. Passive Foreign Investment Company (PFIC) holdings  in the Grand Caymans, etc., are repeatedly said to be held indirectly through Goldman Sachs (hint hint). The number of shares is always “unknown.” The dollar amounts appear to be minuscule. The large number of Form 8621’s included, demonstrating small amounts in holdings overseas, contrasts to the omission of that form about employee Social Security.

Interestingly, PFIC shares or amounts held in the Netherlands or in the Grand Caymans, etc., are UP in 2011 from 2010. Looks as if Romney was convinced in 2010 that he wouldn’t face much of a problem about them in the 2012 race. Could that have been an impression left by the 2010 elections?

Some shares in PFICs were purchased in (late) November 2010, in fact, and in December of the same year.

Narrowing down further to specifics, page after page of the tax returns indicate date acquired for PFICs as “12/14/2010.” Here, just for fun, is a Wall Street Journal article headline for that exact date: “Dems Sweat ObamaCare Ruling.”

An earlier bunch of Romney’s PFIC holdings had been acquired 9/16/2010. Sample headline for that date: “Poll: Climate grows rockier for Dems, Obama.”

Moving on–

Although the vastest sums in Romney’s wealth are capital gains, dividends and interest–unearned income–there is also a (relatively) small category of earned income. For author/speaking fees, American Talent Group LLC paid Romney $178,500. For director’s fees, Marriott International paid him $260,390.

Still, those amounts–which would be substantial for almost anyone else–are dwarfed by the capital gains category.

Short-term capital losses:             $2,292,120. Hefty write-off.

Long-term capital gain:  $9,033,933.

This over-all is the dominant pattern characterizing Romney’s tax posture: some short-term loss, far more than compensated by long-germ gain. A more precise way to interpret the facts might be, some short-term loss as a means to long-term gain. Some short-term loss paving the way to long-term gain.

It’s like buying a company, assuming costly debt/leverage, then treating the loss as another receivable–from the U.S. Treasury, in the form of tax adjustments–when subsequently selling the company.

Dade Behring is one illustration. As the New York Times reported in November 2011,

“Bain settled on a common tactic in private equity: In April 1999, it pushed Dade to borrow hundreds of millions of dollars to buy half of Bain’s shares in the company—and half of those of its investment partners.

Bain pocketed the $242 million. Goldman received $121 million. Top Dade executives got $55 million, records show. The total payout to shareholders reached $420 million—nearly as much as the purchase price for Dade.”

Dade declared bankruptcy and was later bought by a German company.

Romney trusts receive more from govt for 2011 than Romney is paying in income tax

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Romney trusts receive more from govt for 2011 than Romney is paying in income tax

What was that about receiving money from the government, again?

Re-posting from Saturday, responding to a couple of quick questions and further clarifying the earlier post–

Friday p.m., Sept. 21, Mitt Romney finally released his completed tax return for 2011. Finished Monday, released Friday afternoon, in one of those document drops traditionally timed for the start of the weekend rather than for the top of the news cycle.

The filing is dated Sept. 17, 2012, right after–first business day after–public release by Mother Jones magazine of Romney’s videotaped remarks. The three blind trust filings, however, were signed Sept. 12. Safe to say the Romney team waited until after the conventions to finish the tax papers, but the timing of the release may well have been planned before the Mother Jones videotape.

Mitt Romney

For now, a quick note on the Romney trusts.

First, the W. Mitt Romney Blind Trust return for 2011 shows income for Romney’s blind trust of $664,045 from the U.S. government. Top line, after you get through the pages for extensions, etc., is income from

U.S. GOVERNMENT INTEREST: $652,018.

Shortly after that comes U.S. GOVERNMENT INTEREST REPORTED AS DIVIDENDS: $12,027.

Total for 2011: as stated $664,045.

This is interest income alone in 2011, for Romney’s blind trust, from the United States government.

U.S. savings bonds

The same story holds for the other Romney trusts.

The 2011 return for the Romney Family Trust shows

U.S. government interest income:           $662,115.

U.S. government interest in dividend form:         $90,461.

Total U.S. government interest income for the Romney family trust:       $752,576.

 

The 2011 return for the Ann Romney Trust shows

U.S. government interest income:           $362,701.

U.S. government  interest reported as dividends:             $156,157.

Total:     $518,858.

So total moneys received as interest, from our U.S. government in 2011, by the Romney trusts, came to $1,935,479.

 

A snarky person might call that the exact amount–in this category, for 2011–added by Romney trusts to the ‘national debt’ our GOPers gripe about so much.

I don’t feel that way, of course. I favor buying U.S. savings bonds. A few qualifiers, here:

One, as written previously I support buying U.S. Treasury notes, bills, and savings bonds. With interest rates low, it is a particularly patriotic thing to do, and that so many people and business entities around the globe are doing so is further evidence of the solidity of the U.S. government. Low-yielding savings bonds are a fiscally conservative form of investment and a safe place to park money.

Romney’s tax returns do not indicate when Romney or his trusts purchased the Treasury products producing this trust interest income.

Two, this interest income, handsome as it is, is dwarfed by the myriad tax write-offs allowed by our government to entities like Romney’s trusts, by the pages of paper losses and deductions Romney can legally use to reduce his taxes, and above all by the lower federal tax rate applied to income gotten by capital gains rather than by working.

But wait, there’s more. The next Q is how the blind trust returns relate to Romney’s tax return.

The Romneys’ tax return shows total adjusted gross income:      $13,696,951.

Largest single income source: capital gains:          $6,810,176.

Next largest income source: dividends:                 $3,649,567.

Next largest income source: interest:     $3,012,775.

One answer is that the Romneys’ federal interest income comes to one-seventh, or 14 percent, of the adjusted gross income declared on Romney’s IRS return for 2011. Much has been made of that percentage in the 2012 election campaign, as we recall. Saturday’s Washington Post headline on this topic said that Romney paid a 14 percent tax rate in 2011. The WP did not mention that Romney’s income tax burden was almost exactly offset by interest income the Romney trusts received from the U.S. Treasury.

Looking at the same thing another way, without the interest income from Treasury, the Romneys’ adjusted gross comes down to $11,239,472. Admittedly that total would still be enough for their simple needs.

It might also be noted, though, that the income reported is just the interest on those U.S. government products. The face value of the Treasury bonds, notes or bills does not have to be reported, and isn’t. Nor is the purchase date or the type of Treasury product purchased. It’s just money coming back into Romney accounts–the full maturity value of the EE-Series bonds or whatever, which would be a multiple of the reported interest income.

Moving from percentages to dollar amounts, Romney reports owing $1,935,708.00 in federal income tax for 2011. He reports paying $3,434,441. That’s an overpayment with refund due to Romney, according to his return, of $1,498,740. (Box checked applying it to estimated tax for 2012.)

Thus,

to the government:        $1,935,708.00

from the government:  $1,935,479.00

Difference:         $229.00

In short, by some uncanny coincidence Romney’s combined trusts received in interest FROM Uncle Sam, for 2011, almost exactly what citizen Romney is paying in income tax TO Uncle Sam for 2011.

And as stated that’s before factoring in all the offsets, credits, deductions and other means of reducing reportable or taxable income on the family IRS returns.

 

Romney’s releases re finance are posted here.

 

Romney trusts receive more from govt for 2011 than Romney is paying in income tax

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Romney trusts receive more from govt for 2011 than Romney is paying in income tax

What was that about receiving money from the government, again?

Mitt Romney

Friday p.m., September 21, Mitt Romney finally released his completed tax return for 2011.

The date on the filing is 9-17-2012. Thus it was finished right after–first business day after–public release by Mother Jones magazine of Romney’s videotaped remarks about people who don’t pay taxes and want government handouts.

Finished Monday, released Friday afternoon, in one of those document drops traditionally timed for the start of the weekend rather than for the start of the news cycle.

More on the Romneys’ return itself later. The short story is that, for all the complaining Romney’s wealthy supporters do about how much government helps the poor, our government helps the rich more, far more. But as said, later for that.

For now, just a quick note on the Romney trusts.

First, the W. Mitt Romney Blind Trust return for 2011 shows income for Romney’s blind trust of $664,045 from the U.S. government. Top line, after you get through the pages for extensions, etc., is

income from U.S. GOVERNMENT INTEREST: $652,018.

Shortly after that comes U.S. GOVERNMENT INTEREST REPORTED AS DIVIDENDS: $12,027.

Total as stated $664,045, in interest income alone in 2011, for Romney’s blind trust from our gummint.

The same story holds for the other Romney trusts.

The 2011 return for the Romney Family Trust shows

U.S. government interest income at $662,115;

U.S. government interest in dividend form at $90,461.

Total U.S. government interest income for the Romney family trust: $752,576.

The 2011 return for the Ann Romney Trust shows usgov interest income of $362,701. U.S. government  interest reported as dividends: $156,157. Total $518,858.

So total moneys received just as interest, from our U.S. government in 2011, by the Romney trusts, came to $1,935,479.

A snarky person might call that the exact amount contributed by Romney trusts to the ‘national debt’ our GOPers gripe about so much. Or anyway the exact amount so far as we know, for 2011.

 

A few qualifiers, here:

One, as written previously I support buying U.S. Treasury notes, bills, and savings bonds. With interest rates so low right now, it is a particularly patriotic thing to do, and that so many people and business entities around the globe are doing so is further evidence of the solidity of U.S. government reserves. Low-yielding savings bonds are a fiscally conservative form of investment and a safe place to park money.

(Romney’s tax returns do not indicate, so far as I can tell, when Romney or his trusts purchased the Treasury products producing this U.S. government interest income.)

Two, this interest income, handsome as it is, is dwarfed by the myriad tax write-offs allowed by our government to entities like Romney’s trusts, by the pages of paper losses and deductions Romney can legally use to reduce his taxes, and above all by the lower federal tax rate applied to income gotten by capital gains rather than by working.

But wait, there’s more.

Romney reports owing $1,935,708.00 in federal income tax for 2011. He reports paying $3,434,441. That’s an overpayment with refund due to Romney, according to his return, of $1,498,740. (He checked the box applying it to estimated tax for 2012.)

Thus,

to the government: $1,935,708.00

from the government: $1,935,479.00

Difference: $229.00

In short, by some uncanny coincidence Romney’s combined trusts received just very slightly less FROM Uncle Sam, for 2011, than citizen Romney is paying in income tax TO Uncle Sam.

 

Romney: “These are people who pay no income tax”

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Romney: “These are people who pay no income tax”

Where did this Mitt Romney come from?

Let’s be clear, up top. Romney’s remarks at a Boca Raton fundraiser did not just link unworthy people, Obama voters, and the number ’47 percent’. Romney linked unworthy people, Obama voters, ’47 percent’, and “people who pay no income tax.”

 

Romney anti-tax button

Who spoke those words?

Why, Mitt Romney, the GOP nominee for the White House:

“There are 47% of the people who will vote for the president no matter what. All right, there are 47% who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement … And they will vote for this president no matter what … These are people who pay no income tax … My job is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.”

Did Romney miss his entire campaign over the past two years? Since when did he of all people equate paying federal income tax with personal responsibility?

(Note: I do, to some extent. Not he.)

Watching the tape, I found the casual they-pay-no-income-tax comment more jaw-dropping than the rest. (Had Romney just learned that he had to write a check to the IRS for 2011?) The candidate’s unbecoming dismissal of half the population is hardly news–aside from its exposure–nor is his dismissal of peace in the Middle East. This is basically the corporate GOP mindset. These are the same people, after all, who have abortions in their own families if they so choose but who are perfectly willing to subscribe to party platforms illegalizing the procedure if it will help them consolidate policy on matters dearer to them. That those policies do not benefit the overwhelming majority of the population is a point about which most GOP officeholders, or future lobbyists, have repeatedly shown themselves to be indifferent.

But elevating paying your income tax to a moral standard?

Who is this man?

Bob Hope must be spinning in his grave.

Retreating to common sense–it is a truism that no one likes to pay taxes. That’s one reason why this country, with its ideal of widespread literacy, still relies so heavily on ‘hidden’ taxes that are destructively recessive, such as sales taxes and ‘user fees’, etc. No one likes to pay income tax, although some people are patriotically proud of how much they contribute. Anti-IRS jokes have been a staple of a certain kind of humor at least since Bob Hope. Hope’s delivery and diction tended to be mild-mannered, not Tabasco, but could not have been confused with pro-tax. Like Romney’s candidacy early on, they went over well with the white-shoes-white-belt crowd that are Romney’s traditional base.

 

bleahh

Romney himself has acknowledged a lack of fondness for taxes. To do him justice, Romney has said openly–even on the campaign trail–that he himself uses every available mechanism to reduce his taxes:

“ROMNEY: Let me also say categorically, I have paid taxes every year, and a lot of taxes.

My view is I have paid all the taxes required by law. I don’t pay more than are legally due.”

More broadly, the notion that paying taxes is bad is hardly a subtext in this year’s Republican campaign.

The evidence on this point, in fact, gives new meaning to the old phrase ’embarrassment of riches’. See among numerous examples romney’s public remarks on Aug 24:

“In calling for a broader, simplified tax code, Republican presidential candidate Mitt Romney said Friday that bigger businesses, in knowing how to utilize loopholes in the tax code, are “doing fine in many places” compared to small businesses.

“We’ve got to make it easier for small businesses,” Romney told a crowd of about 300 people at a high-dollar fundraiser in Minnesota. “Big business is doing fine in many place- -they get the loans they need, they can deal with all the regulation. They know how to find ways to get through the tax code, save money by putting various things in the places where there are low tax havens around the world for their businesses. But small business is getting crushed.””

One looks in vain for criticism in Romney’s comments about big businesses not pulling their weight, feeling entitled, etc., in connection with paying no income tax. It’s no wonder the biggest guns in the GOP, especially some rightwing media personalities, are jumping all over Romney for all of a sudden getting religion about paying your income tax. I don’t remember the last time George Will, Charles Krauthammer or Bill Kristol stepped forward to support same.

Then we have Romney’s choice of a running mate, Paul Ryan (who is also running for Congress in Wisconsin, and has a strong challenger, Rob Zerban).

The Zerbans, Wisconsin

The same day that Romney made his “big businesses are doing fine” comment, Ryan said much the same thing:

“By plugging loopholes, which are uniquely enjoyed by higher income individuals, you’re reducing their ability to shelter their income from taxation . . .”

Needless to say, the Romney-Ryan campaign has not included specifics on what ‘loopholes’ would be cut MORTGAGE INTEREST DEDUCTION.  The Romney-Ryan insistence on extending all Bush tax cuts for the wealthiest, eliminating even the remaining U.S. inheritance tax, and lowering the income tax for corporations does not suggest that the loopholes would be only those enjoyed by the wealthiest among us MORTGAGE INTEREST DEDUCTION.

 

To return to that “they pay no income tax” line–

The problem with Romney’s comments is not only that they were impolitic, inaccurate and mean-spirited. They were also confused. You cannot at one and the same time campaign against taxes, and elevate paying your fair share of taxes as a moral standard. You cannot openly acknowledge that the tax code already favors the wealthy and big businesses–as both Romney and Ryan have done–and then successfully claim that it’s the poorer citizens who are getting away with something.

Except when you’re talking privately to a cluster of wealthy individuals who already tell themselves that.

Orwell lives.

Speaking of impolitic remarks, there was a slideslip into accuracy in Romney’s “big businesses are doing fine” comments, which is one reason they were so widely quoted. Analyses, including this one by CNBC, have corroborated the finding that, indeed, the one percenters are doing fine using available tax breaks. The New York Times summarized some of the ways Aug. 10, the Journal Tribune Aug. 25. Plenty of further information is available.

Not that the one percenters are the only ones, of course. The question of who is not liable for federal income tax under the current tax code is now getting some clarification it has long deserved, thanks to Romney. Here among others is a good run-down by the Christian Science Monitor.

In fact, on why Romney’s conflating non-income-tax payers with 1) Obama voters and 2) unworthy people is as inaccurate as it is ugly, let’s take a leaf from Elizabeth Barrett Browning, and count the ways.

Non- federal income tax payers, by state percentages

Factor Number One: Region or State

The nonpartisan Tax Foundation published a report in 2010 showing that paying federal income tax varies widely by state. The ten states with the largest percentage of non-payers? They include nine states–Idaho, Texas, and southeastern states including Mississippi, Alabama, Georgia–likely to go for Romney. Of the ten, all but one–Florida–is conventionally designated a ‘red state’, and Florida has a Republican governor and legislature.

Factor Number Two: Age

Florida also has a sizable retired population. As this fuller breakdown by the Tax Policy Center reminds us, one cohort paying less federal income tax is the elderly. Senior citizens on Social Security benefit from tax expenditures that Romney and Ryan have claimed, on the campaign trail, to support. The oldest voters, be it noted, are the only age group of voters among whom Romney bests President Obama.

Factor Number Three: Low Income

The Center on Budget and Policy Priorities reports that the main reason people don’t pay federal income tax, when they don’t, is that their incomes are too low for them to be tax liable. Here Romney is on firmer ground, so to speak. True enough, many of the poorest households do not support him–except when they are also seniors, or Southern whites. A number of them, including households with elderly members or Southern whites, also receive Social Security Supplemental Security Income (SSI), disability aid, Medicaid, WIC, unemployment benefits or some other form of public assistance. So presumably a Romney-Ryan tax plan will try to catch more of the nation’s poorest households in a higher tax bracket. Those are the indications so far, both from Ryan himself and from the 2012 GOP platform.

Factor Number Four: Military Service

Federal income tax on compensation for serving in the military is offset in several ways. Compensation received for service in a combat zone, for example, is not subject to federal income tax. There are also state income-tax exclusions for military pay in various states. By the way, the states with the best exclusions are not necessarily red states. Cash-strapped red states are at least as likely as any other states to limit the income tax exclusions.

Factor Number Five: High-Net-Worth Individuals and Corporations

On not paying taxes at the upper end, you can find copious information in various glossy sources. A quick hint here, but really Romney and Ryan’s own comments–and the scant information so far released in Romney’s own tax returns–give the picture. If you want to have more fun, and enjoy scenic views of golden beaches and sun, you can read up on off-shore tax havens. And of course numerous top corporations make tax avoidance part of their ongoing strategy. They generally poor-mouth while doing it, too. Where are Romney and Ryan on these entities, perennially ready to portray themselves as victims?

Sad to say, some of the households and individuals characterized by Governor Romney as takers will vote for him anyway. Their local newspapers and television news channels may fail to clarify his remarks or to correct the tax arithmetic. Their willingness to believe it’s different when you accept government aid while simultaneously being white will undoubtedly be catered to by the campaign. That these are some of the same households hurt worst by Romney-Ryan policy won’t change their votes.

But the fact remains that the real one-way-streeters comprise those responsible for the mortgage-derivatives debacle, those who benefit financially from it, and those who oppose any process that would lead to retribution or reimbursement. Only racial politics could make the GOP imagine that any large proportion of the country can be made to forget who was responsible for our biggest crash since the Great Depression.

Where did Mitt Romney get his 43 percent figure?

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Where did Mitt Romney get his 43 percent figure?

Move over, Goldilocks. Mitt Romney has fine-tooled your metrics.

As revealed yesterday by Mother Jones, Romney was videotaped at a May 17 fundraiser in Boca Raton giving affluent donors his assessment of the campaign with unbecoming clarity. He was particularly unbecoming about people who don’t vote for him. We’ll get to some of those candid remarks later.

 

Video capture of Boca Raton fundraiser for Romney

For now, it’s Romney’s take on the numbers that intrigues:

“There are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them,” Romney said in a hidden-camera video of his remarks at a private fundraiser earlier this year posted on Monday on the left-wing Mother Jones magazine’s website.

“My job is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives. What I have to do is convince the 5 to 10 percent in the center that are independents,” he said in remarks convincing donors to write checks for his campaign.”

Most commentary so far has focused on Romney’s ’47 percent’ number, and rightly so; see later. But Romney’s horse-race assessment reveals as much as his version of sociology. Going on to that ‘center’=’independents’ comment that follows, you get more than the inflammatory dismissal of 47 percent of voters. Use Romney’s arithmetic: 47 percent ‘pay no income tax’ etc; 5 to 10 percent are ‘independents’; that leaves 43 percent. Subtracting 47 percent from 100, then 10 percent (of ‘independents’) from 53–thus Obama 47 percent; Romney 43 percent.

Romney clearly thinks he has 43 percent, and only 43 percent, in the bag. Why? Who are the 43 percent? Where did he get that number? –Recent polls? Tax brackets? Income brackets? White voters? GOP registration?

Looks like not.

Where did Romney get his figures? CBS News had put out a recent widely reported opinion poll on the presidential race as of May 17. But it gave Romney the lead, and almost reverses Romney’s numbers:

“According to the survey, conducted May 11-13, 46 percent of registered voters say they would vote for Romney, while 43 percent say they would opt for Mr. Obama. Romney’s slight advantage remains within the poll’s margin of error, which is plus or minus four percentage points.”

The CBS poll, furthermore, was in line with much or most election 2012 polling in the time frame. As this wiki overview of election tracking polls and opinion polls shows, Romney was running fairly often behind and in the forties–but so was Obama. The poll closest to Romney’s numbers came out late April to early May, an Investor’s Business Daily/Christian Science Monitor/TIPP poll giving Obama 46 percent to Romney’s 43–with a helpful breakdown of voter demographics that would tend to jibe with Romney’s sociology.

Only one poll around then has Romney’s exact numbers: an NBC News-Wall Street Journal poll dated May 16-20 gives Obama 47 percent, Romney 43.

The catch is that the NBC-WSJ poll was not out yet, or not publicly.

Republicans, be it noted, tend to emphasize We’re-ahead! slogans when asking donors for money. So if Romney’s buddies in the corporate media shared a foretaste of recent polling with him, Romney knew in Boca Raton that he had some numbers to get out in front of. (Dems tend to use scare tactics–We’re going to lose!–for the same purpose.)

 

Back to a somewhat larger perspective, it’s interesting how closely Romney’s breakdown of the electorate into 1) takers, 2) his own voters, and 3) ‘independents’=’center’ tracks with the punditry most often put out by the larger media outlets (and by Fox News).

Romney’s amateur punditry also tracks closely with the pros on the question of what, exactly, constitutes an ‘independent’:

“What I have to do is to convince the five to ten percent in the center that are independents, that are thoughtful, that look at voting one way or the other depending upon in some cases emotion, whether they like the guy or not.”

Independent=center. Thoughtful=emotion. Emotion=”whether they like the guy or not.” Orwell could not have said it better.

Eric Arthur Blair, pseud. George Orwell

Mr. Romney has been called many things, but he is truly typified by Aldous Huxley’s model of the affluent businessman who, when he opens up, turns out to be filled with comfortable hogwash.

more to come

Update Sep 20:

Speaking of the Wall Street Journal, Media Matters now has this piece on Romney campaigners who write op-eds for WSJ–without having their connection to the Romney campaign clarified.

Looks like a two-way street.

The Republican Party’s legitimate difficulties with Todd Akin, part 2

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The Republican Party’s legitimate difficulties with Todd Akin, part 2

 

Akin with Jaco

What Todd Akin did, with his ill-timed comments, was to illuminate

1) the draconian hard-right stand against abortions. This is the no-exceptions position that would prevent terminating a pregnancy for an eleven-year-old girl sexually abused by her stepfather. (The medical case just referred to is not hypothetical. It occurred in Texas. It never became a dispute over abortion. )The no-exceptions position would compel a woman or girl to carry a fetus to term even if the fetus were anencephalic.

2) the superficiality of Republican establishment support of such positions.

 

Scott Brown, "pro-choice Republican"

Let’s put this simply: Most top GOPers do not support these positions. But while quietly opposing them, the top echelon of the Republican Party continues to entice the vote and the financial contributions of party faithful who hold them.

 

Carlson with dancing partner

I have written about the broader topic before, as in 2006 posts on Tucker Carlson of all people. Like Akin, whom he does not much otherwise resemble, Carlson came out with some inconveniently candid remarks at a particularly inopportune moment. Carlson, a Republican commentator who later appeared on Dancing with the Stars, voiced on television the key political fact that the Christian right tends to be used and abused by the power structure it keeps in office.

Things haven’t changed much, in that respect, since 2006. Look at the party establishment’s reaction to Akin.

As everyone not living under a rock knows, Rep. Todd Akin (R), challenging Sen. Claire McCaskill (D) in Missouri, gave a remarkable interview on August 19. Here is the video of the interview, on Fox.

Here is Akin, on abortion in cases of sexual assault:

“Well you know, people always want to try to make that as one of those things, well how do you, how do you slice this particularly tough sort of ethical question. First of all, from what I understand from doctors, that’s really rare. If it’s a legitimate rape, the female body has ways to try to shut that whole thing down. But let’s assume that maybe that didn’t work or something. I think there should be some punishment, but the punishment ought to be on the rapist and not attacking the child.”

There are two prongs to the difficulty Akin’s statements have caused the GOP. One is the false science, the other is the genuine belief. As I previously wrote, the genuine belief is what is giving the Republican Party so much heartburn.

But the GOP also has its vulnerabilities on the false science.

Rick Santorum

Again, I do not question Akin’s sincerity. But it is incumbent on rational people to correct errors of fact when they arise, especially when they are widely disseminated and when they support disastrous public policy. Remember Iraqi WMD?

CIA corrects previous intelligence reports on WMD

The mystery is not how Akin, or anyone, could form such a notion in the first place, that is, the notion that a raped woman’s body wards off pregnancy. As with other wishful beliefs, the wishful belief that a sexually assaulted woman has innate defenses against pregnancy is underpinned by a few grains of truth. Stress and anxiety can deter pregnancy, even in women who want to conceive and who are trying to become pregnant. (Hence the lucrative explosion in the reproduction industry of fertility clinics and the like.) Injury can interfere with becoming pregnant and can cause miscarriage. Each subsection of this unhappy topic has generated extensive medical scholarship.

On a more cheerful note, studies have shown that most rapists suffer some form of sexual dysfunction. (This is one reason why ‘castration’ does not work as a tool of public policy against sexual assault.)

The more puzzling question is not how Akin formed a wrong notion about conception in the first place but how he, or any literate person 65 years old, could have retained such a notion. Actually, that’s easy to answer: Like any fellow human being who adopts a wrong belief, Akin just never checked his in any meaningful way. He opposes terminating a pregnancy even in cases of rape. His position is obviously painful even for him. So he just adopted the version of science that gave him most comfort. And he never course-corrected, intellectually speaking, even when news reports brought evidence of thousands of Albanian women pregnant after the attacks on Kosovo.

How long did it take Congressman Akin to correct his previous mistake, once it was emphatically brought to his attention?  –About two days.

Here is Akin’s own statement on the interview from his web site, posted August 19, the day of the interview. Note that he does not clarify or retract the false science in his morning comments:

“As a member of Congress, I believe that working to protect the most vulnerable in our society is one of my most important responsibilities, and that includes protecting both the unborn and victims of sexual assault.  In reviewing my off-the-cuff remarks, it’s clear that I misspoke in this interview and it does not reflect the deep empathy I hold for the thousands of women who are raped and abused every year.  Those who perpetrate these crimes are the lowest of the low in our society and their victims will have no stronger advocate in the Senate to help ensure they have the justice they deserve.

“I recognize that abortion, and particularly in the case of rape, is a very emotionally charged issue.  But I believe deeply in the protection of all life and I do not believe that harming another innocent victim is the right course of action. I also recognize that there are those who, like my opponent, support abortion and I understand I may not have their support in this election.”

 

Morgan puts up empty chair

A day later, Akin took a somewhat less firm line by failing to show up at CNN to be interviewed by host Piers Morgan. Morgan avenged himself by satirically positioning an empty chair on set, castigating Akin in absentia.

Eastwood talks to empty chair

By the way, Clint Eastwood may deserve everything he’s gotten in response to his bizarre performance at the Republican National Convention. No one seems to have noticed, however, that Eastwood’s empty-chair routine was surely Eastwood’s idea of a tit-for-tat on the Akin controversy. Now we know that Clint Eastwood, or someone in his household, watches Piers Morgan.

It’s a safe guess that Eastwood, like most top Republicans, was also chafing at hearing about Todd Akin.

Back to Akin–the following day, he issued his public apology on YouTube, including the statement, “The fact is, rape can lead to pregnancy.”

Full text:

“Rape is an evil act. I used the wrong words in the wrong way and for that I apologize. As the father of two daughters, I want tough justice for predators. I have a compassionate heart for the victims of sexual assault, and I pray for them. The fact is, rape can lead to pregnancy. The truth is, rape has many victims. The mistake I made was in the words I said, not in the heart I hold. I ask for your forgiveness.”

Akin has also rightly observed that “the entire [Republican] establishment” turned on him.

Certainly a number of prominent GOP politicians and commentators have condemned Akin’s version of medical science. They’re not out of the woods yet, though. For one thing, that kind of rational criticism tends to be a bit of an uphill climb for them.

The Republican Party, after all, is still the major party dug in about, opposing science on,

  • climate change
  • greenhouse gases
  • tobacco use as a cause for cancer
  • environmental factors as causes for cancer and other diseases
  • occupational safety as a factor in health, e.g. in mining
  • the relationship between highway speed and highway fatalities
  • the relationship between driver age and highway safety
  • the connection between ‘fracking’ and earthquakes

Additionally the GOP has shown itself, shall we say, reluctant to leave intact any kind of regulation that science indicates would boost the safety of the water we drink, the air we breathe and the soil in which we grow food. Congressional Republicans, always fighting from the rear on issues of public safety and public health, even tried unsuccessfully to prevent public disclosure of unsafe consumer products, a reform pushed by the Obama administration.

For related reasons, the same faction is also fighting to the political death to prevent public disclosure of  abuses in the financial sector.

On August 21, Akin told Sean Hannity that Mitt Romney was exploiting the “legitimate rape” issue. Akin had a point. Akin’s gaffe highlights the contrast between the hard-nosed, practical, get-it-done business type Romney wishes to be thought, and the views Romney panders to among non-one-percenters he induces to vote for him.

Republican Party’s legitimate difficulty over Todd Akin

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Republican Party’s legitimate difficulty over Todd Akin: Re-cap and overview, part 1

 

Returning to the topic of Rep. Todd Akin’s senate race in Missouri, the real sticking point for Republican Party movers and shakers is not Akin’s mistaken science, his comforting notion that a woman’s body will ward off pregnancy in a sexual assault. The real sticking point, for top Republicans including presidential nominee Mitt Romney, is Akin’s genuine belief that abortion is wrong in all cases.

Todd Akin

(Certainly, Akin’s belief appears to be genuine, and short of proclaiming self a mind reader, it can be taken to be sincere.)

The fact that I do not agree with this view is beside the point. The point is that many voters and contributors on whom the upper levels of the GOP depend to keep office do agree with it. The official Republican Party platform adopted at the 2012 Republican National Convention–along with threatening to cut the mortgage interest deduction–holds with this view.

Those religiously conservative voters who hold this view are the people being stiffed by the national GOP, up to and including Romney.

So much for lip service. The Republican candidate for office who most strongly comes out with the anti-abortion party line in 2012–openly, candidly, unequivocally–happens, by some fluke, to be exactly the candidate that almost every well-placed Republican operative tries to exile beyond the pale. Akin’s remarks highlighted a view that many Republicans–especially those in Washington–do not hold. Worse yet, Akin’s remarks interfered with top Republicans’ ongoing strategy of keeping that view quiet.

Akin, Ryan

The adverse reaction to Akin’s remarks by wounded important people in the wounded top echelons of the GOP was swift, widespread and unequivocal.

Let no one be accused of exaggerating the reaction. Quick recap:

The day of Akin’s interview, then-presumptive nominee Mitt Romney promptly, if tersely, distanced himself from Akin’s comments.

The similarity between Akin’s no-exceptions position and that of Romney’s running mate, Paul Ryan, coming swiftly to light, the Romney campaign seems to have decided that just rejecting Akin’s views was not going to be enough. The next day, Romney came out to condemn Akin’s words as “inexcusable.”

The next day, he went farther yet, expressing a public hope that the Missouri congressman would leave the race.

Mitt Romney

Romney, be it noted, was not exactly going out on a limb here, separated from the rest of the party establishment. Other nominees suggesting that Akin should drop out include Sen. Scott Brown of Massachusetts, strongly challenged by Elizabeth Warren. (Brown faces the key difficulty that Warren would make a better senator.)

Elizabeth Warren

 

Reportedly joining in against Akin was incomprehensibly well-paid radio host Rush Limbaugh, though Limbaugh back-pedaled afterward. As the deadline for Akin to drop out without penalty approached its last hours, establishment pressure on Akin mounted.

The August 21 deadline, as we know, came and went with Akin remaining in the race on the eve of the RNC. Rep. Darrell Issa (R-Calif.) joined the throng asking him not to. There aren’t many occasions when  Issa can chastise someone for ill-considered speech, but he stepped up to the plate this time. Must have been something of a shock to some of Issa’s supporters back home.

Coming to the convention, Romney seized air time in interviews to reiterate his opposition to Akin.

 

Matalin on air

Top GOP operative Mary Matalin went even farther. As previously written, Matalin said emphatically on air that the Republican Party will fund a write-in candidate against Akin in Missouri, if Akin stays in the race. As of last writing, Akin has not dropped out, though Matalin has not yet retracted her statement.

 

Rove at Republican National Convention 2012

Matalin’s king-of-the-hill moment didn’t last long. Funding a candidate to run against Akin was tumbled off by Karl Rove’s expressed desire to murder him. In a gathering for wealthy supporters and party strategists, Rove’s fancy turned to homicide. He later apologized to Akin. Rove was at the convention. Akin was not.

 

So much for pro-life.

It is fair to take Akin’s remarks to be sincere. It would be fair to accept Rove’s remarks as sincere.

And this, gentlemen and ladies, is what the Christian right gets from the national Republican party: It is okay for rightwing pro-lifers to show up and vote; it is okay for them to contribute money in small amounts; it is okay for them to keep Wall Streeters in power. Position to get money, money to get position, all fueled by some vague notion of status.

But when one politician gets so out of line as to state openly the party’s no-exceptions position on abortion–makes clear that yes, that’s what the party stands for–the full weight of the party comes down on him.