Tag Archives: Mitt Romney

Biden wins VP debate, Ryan gulps water

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VP debate: Biden wins, Ryan gulps water

 

C-Span is great. A recommendation for future debate watchers: C-Span is the way to go. Public broadcasting is the way to go. They’re the channels for navigating between the false split-the-dif mindset on the networks, on one hand, and the self-caressing party-time mindset on cable, on the other.

As to last night’s vice presidential debate between Vice President Joe Biden and Congressman Paul Ryan, you can tell that the Democrats won when commentator-propagandists like WashPost’s Dan Balz call it a ‘draw’. It will be interesting to know where Mitt Romney stands on further benefits (styled ‘education reform’, aka standardized testing) to Kaplan Inc., the Washington Post Co. subsidiary so large it has all but subsumed the parent corporation.*

Signs of the times

But enough said on the horse race.

As to my question in yesterday’s post—whether Ryan would say anything clarifying Romney–Ryan gave a couple of answers relating to abortion.

1)      Speaking for a Romney-Ryan administration, Ryan said, “We don’t think that unelected judges should make this decision.” Seems pretty definitive, that Romney would push legislation and regulations–but does not preclude appointing anti-abortion judges, though it does not promise to do so.

2)      Ryan said clearly that a Romney-Ryan administration would oppose all abortions except in cases of rape, incest, or where the life of the mother is at stake. This one, assuming it’s accurate, is newly definitive—and another shift of position–though it leaves cases of the mother’s health, in any situation short of death’s-door, unresolved.

 

Chart: deductions

Notably, Ryan still did not address the question of the mortgage interest deduction. Even when asked directly by moderator Martha Raddatz whether the budget “loopholes” Ryan referred to several times would include the mortgage interest deduction, the congressman ducked.

Somewhat more clearly, Ryan did attack Secretary of Defense Robert Gates, accusing him of “equivocation.”

Interesting choice of words, given the source. Ryan reassured the public several times that “we” “agreed” with the Obama administration on foreign policy choices—even while criticizing the choices. He also criticized the administration for an alleged lack of clarity in foreign policy, either omitting or indirectly acknowledging that strategy and tactics sometimes demand some tacking.

A lot of GOPers fall into that one. The blood-thirstiest ones never seem to recall that it might be wise not to give potential attackers a road map.

 

President and Mrs. Reagan, 1983

Meanwhile, Ryan’s repeated references to “Marines” re Benghazi were an unhappy reminder of the Marine barracks in Beirut.

Back to that channel-selection guide, up top. A very few minutes’ worth of cable commentary last night was enough to convey that too many commentators a) focused on their notion of ‘style’; b) used ‘style’ as a tool for the usual double-standarding; and c) didn’t bother about accuracy. Biden’s mocking smile was criticized. Ryan’s doing the same thing was not.

Ryan’s smile wasn’t as broad.

Oddly, given the way some of the tea-leaf readers home in on the smallest detail, no one noticed that Congressman Ryan gulped water some ten times in the debate. Or at least that’s my count, according to my notes. The first time was at the beginning; he kept returning to that life-giving fluid at tense moments; and he ceased only when the end was in sight.

Update Friday:

None of the on-air commentary I caught mentioned Ryan’s need for lots of water, but I am not the only person who saw it. So did Bill Maher and others; see thread.

 

*I was the sole journalist in the DC region who reported the Post Co.’s financial stake in GWBush’s ‘education reforms’ under the Bush administration. Neither the ‘left’ nor the ‘right’ picked it up and shared the information with the broader public. Nor did the Washington Post newspaper.

A question for tonight’s VP debate

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A question for tonight’s VP debate

 

I have no prediction about tonight’s vice presidential debate between Vice President Joe Biden and GOP nominee (and congressional nominee) Paul Ryan. I do have one question beforehand, and it’s whether Ryan will say anything that will shed light on Mitt Romney. Listened to closely, Ryan might say something–intentionally or otherwise–that will clarify Romney’s own positions, will widen the window onto a hypothetical Romney-Ryan administration.

 

Neo but not new

This comment should not be misconstrued to suggest that what Romney offers is entirely unclear. Broadly, Romney offers what the top echelon of the GOP always offers–reverse-Robin Hood at home, and contract-generating bloodthirsty incursions abroad. (If you think this summary sounds reductive or harsh, try to rebut it. Try to remember one time in the past two years that Romney has called for kindness and moderation abroad, has counseled restraint rather than intrusion, or has commended the president for boosting a more favorable view of America around the world.) The mere fact that the disgraced neo-cons and PNAC alumni left over from the Bush administration have gravitated to Romney should be clue enough.

For quick thumbnail illustration, try this short-short-short film, working title These Guys:

http://tinyurl.com/bmq6stf 

If you want more trillion-dollar wars and more trillion-dollar redistribution of wealth to Wall Street, less prosecution of mortgage fraud at home and less budgeting for embassy security abroad, Romney’s your man.

 

Talking tough is one thing, paying for embassy security another

Wars abroad, regression at home. End of story–except for the horrible specifics including cost, yet undisclosed by Romney; and except for the consequences.

But the clarity of the big picture does not illuminate the corner that is social policy. Ironically, even while Romney-Ryan social policy has been discussed and ventilated out of all proportion to what Romney and Ryan plan for this country and the globe, I for one have no prediction as to what Romney would actually do about abortion, if he made the White House.

This is not to be stubborn. I know that Romney has pandered to the right wing in every conceivable way, in every venue, on social matters. I also firmly believe that Romney’s flip-flopping on economic and fiscal matters will leave unaltered his bedrock rich-get-richer core. Thus the most recent flip-flop on abortion and birth control–Romney’s remarkable statement this week that he doesn’t know of any legislation (connected to him) that would change things–cannot be taken as an earnest of anything. It is certainly not a sign of true, bedrock moderation under all the foaming at the mouth. Someone whose bedrock is peaceable could not stomach all the blood-and-guts Romney has been spilling on the campaign trail, in either foreign policy or social policy.

That said, a prediction as to which way Romney would actually go on Roe v. Wade, in the Oval Office, is impossible. It all depends on what’s in it for him.

No matter how hard I try, I cannot imagine Romney’s standing up to defend fundamentalist anti-abortionists, if doing so took political courage. Likewise, I cannot imagine Romney’s standing up to defend women, if it took political courage. When has he ever done either one, if–again–it took political courage to do so?

Here is the only way to project what a chief executive Romney would do. What’s in it for him? What is the over-all deal? What deal does the anti-abortion/pro-choice/fill-in-the-blank position seal? Or sweeten?

 

Big Bird turnaround artists

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A Big Bird round-up

For fun, or not

Big Bird costumes are hot sellers for Halloween this year. It happened you-know-when.

Not every comic can top that.

Big Bird in the news

But then it’s not all comedy.

Pathos

Not all history is in the past, either.

Romney would end unemployment lines. No more unemployment compensation

This might be a good time to remember that the Party of Romney, while dwindling, is the party that has shown itself unabashedly willing to use fiscal cliffs for blackmail.

Look back in anger

 

It’s the same party that has worked for decades to cast doubt on any publicly funded program that could in any way benefit children.

Generations

This is the same candidate who has expressed support for shedding blood around the globe–except when the shedding was done in a measured, limited way, to take out the main coordinator behind the attacks of September 11, 2001.

War room

This is the same candidate who has repeatedly expressed willingness to cut education funding, with a sop to ‘choice’ in vouchers for poor families.

Reading, fun and information

He is also the candidate whose corporate turnarounds succeeded more for a comparatively small group of investors than for employees in companies his firm bought in fire sales.

Investment

 

Note: There is probably some spinner out there right now, attempting to reassure the public that Mitt Romney didn’t mean it about firing Big Bird. To do the man justice, I believe he was sincere.

 

More on Romney finance and GWBush connections

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Ties with Team Bush part 2

Continuing previous posts

This seems like as good a time as any to follow up on previous post on Mitt Romney’s non-released tax information and Romney’s quiet, long-time, scantly reported but extensive ties to the George W. Bush team. For one thing, Bush recently announced that he will be visiting the Caymans just before the election.

 

Bush to address tanned investors

Amidst the hubbub on the front lines and the day-to-day movements of polls, Romney has succeeded in remaining closeted about his finances. It’s one thing he has been consistent about. It is safe to say that Romney has achieved the distinction of being by far the most secretive of any major-party candidate running seriously, if that’s the word, for high office. Richard Lardner reported back in February that Romney did not release names of his bundlers even after President Obama did so. As we know, the pattern extends to Romney’s tax returns–with the exception of partial returns for two recent years–and of course to the para-political organizations including ‘super PACs’ supporting Romney and the GOP even while capital stays on the sidelines when it comes to investing in business. (So much for GOP talk about ‘small business’.) Thus one of the wealthiest men in America, a long-time politician with extensive financial and political connections to the wealthiest members of the GOP in the finance and communication sectors across the country, can run for the White House without ever being called to account on his own financial track record.

 

Imagine what they'd say if this pic had Obama in it

Up top, let me say that this situation would be destructive even if Romney had established his track record in something other than his peculiar line of finance. The lack of transparency and accountability would be destructive even if Romney had been engaged in manufacturing, like his father, instead of in short-term paper losses to enlarge long-term gains, largely at other people’s expense. But it does not help that Romney’s track record includes so much gain for him, pain for others.

 

Romney to Detroit

Today’s history lesson

Remember one of Romney’s successful turnarounds in the 1990s, his temp work returning from Bain Capital to Bain & Co.? That turnaround came partly at the expense of the then-Bank of New England and partly at the expense of American taxpayers.

Bank of New England had already gone bankrupt following its dealings with Bain & Co., where Romney  worked before forming Bain Capital with several colleagues (including T. Coleman Andrews III of a close Bush-connected family). Bain & Co. had lapsed on covenants with Bank of New England. But notwithstanding that the company had contributed to the bank’s failing, Romney’s work at Bain & Co. included getting Bain’s debt to Bank of New England reduced from $38 million to $28 million.

 

FDIC

Bank of New England, in Chapter 7, had already been seized by the Federal Deposit Insurance Commission (FDIC). The failure of the bank and its sister banks is the sixth largest bank failure in U.S. history, thus far. From Investopedia:

“At the time, the BNE was the 33rd largest bank in the U.S., and including its sister banks, it had assets totaling $21.8 billion and deposits totaling $19 billion. As with most bank failures, a bad loan portfolio triggered BNE’s downfall.”

The bank’s bad portolio included Bain. Thus what Romney’s negotiating means, in plain English, is that Romney succeeded in getting Bain’s bill to the American taxpayer reduced by $10 million. Romney’s negotiating tactic was as simple as it was unsavory. Bain & Co. at the time was in dire financial straits–explaining why Romney was brought back on board. Romney turned the minuses into pluses, using them as leverage against the FDIC: He threatened to use Bain’s remaining funds for bonuses to (end-stage) Bain executives.

Back to 2012

As written earlier, there are undoubtedly several reasons why Romney doesn’t want to release his tax returns–or any financial records, except the partial recent tax returns from two presidential-campaign years.  One is that open records would clarify the close ties between the Bush and Romney teams over the years. Even a quick look at Romney’s business career shows that Romney’s interests have been tied closely to Bush’s. Previous posts dealt with entities including CaterAir–the Marriott spin-off that pretty gave Dubya his business career–and World Corp, South African Airways, and InteliData, where business relationships between the Bush people and the Romney-Bain people proliferated. Predictably given its Marriott ties, CaterAir has retained ties with Bain Capital over the years. See for examples corporate bios for Bain alumni from an SEC filing. One is an alumna of CaterAir, Graham a co-founder of Bain. This filing dates from the 2005 merger of InteliData and Corillian Corporation. InteliData, with Bain alum John Backus on board, became Coriallian; Corillian bought CheckFree, now FISERV.

 

Two candidates

To reiterate, in narrow political terms it does not benefit the Romney campaign to be tied too closely to the Bush years. It is beside the point that some recent polls have suggested that Romney is more of a drag on Bush than the other way around; during the past four years leading up to election 2012, the smart money would have seen it the other way around. Clearly the Romney campaign did. Team Romney has been working with GWBush alumni quietly, behind the scenes (as in the machinations in Virginia). By and large, the Bush and Cheney clans have not co-appeared out on the campaign trail with Romney and Ryan. Nor have the disgraced neo-cons left over from the Bush administration, who have nowhere else to go–and have flocked to Romney.

More on that later.

The fiscal and political Bush-Romney relationships have been thick on the ground in northern Virginia, and the D.C. suburbs in Virginia are the major political and financial hub for state and national GOP. Small wonder rival Republican candidates for the White House in 2012 could not even get on the ballot in the Birthplace of Presidents. Except for the well-organized Ron Paul, no one had the skills to compensate for Romney’s lock on what is politely called the establishment in Virginia, i.e. the nexus of corporate, NGO and political links between candidates and their financial support in Virginian suburbs of Washington, D.C. Owen Wister must be rolling over in his grave.

Not that northern Virginia is the only spot. Let’s start with a loose thumbnail of some other Bain investors over the years. The list includes Reynolds DeWitt & Co.

Thus Romney-Bush ties also take us to Dallas, Texas, home of a financial company with the Dickensian name Crimstone Partners (not to be confused with a fantasy character aptly named Crimstone). Here is the company self-described, from one of numerous publicly released statements:

“About CrimStone Partners

CrimStone Partners is a special purpose private equity partnership designed to find, acquire and build companies.”

[sound familiar?]

“The fund’s investors consist of more than 35 highly distinguished business leaders, senior investment bankers and private equity professionals from firms such as Morgan Stanley, LazArd, Dresdner Kleinwort Wasserstein, Bain Capital, AEA Investors, Allied Capital, Seven Rosen Funds, Blum Capital and CIBC.”

CrimStone has substantial ties to Ohio–where the good Sen. Sherrod Brown is enduring an avalanche of attack ads, and where GOP efforts to limit accessibility to voting were successful in 2004.

“CrimStone’s largest investor is Reynolds, DeWitt & Co., an investment firm in Cincinnati, Ohio, whose current holdings include basic manufacturing businesses, national franchise holding companies, real estate developments and a professional sports franchise.”

CrimStone has a claim to fame aside from the colorful name: Its main investor is the firm that backed George W. Bush throughout his business career, bailing him out at critical junctures, and made him a millionaire. Reynolds, DeWitt & Co., as noted, has ongoing business ties with Bain Capital (where, Romney emphasizes, he no longer works). Both Mercer Reynolds and William DeWitt support Romney for president in 2012. No surprise there; they supported him in 2008 against Sen. John McCain, too.

 

Anti-Romney ad in 2007

DeWitt, founder and co-chair along with Reynolds of Reynolds, DeWitt & Co., has continued to donate in the 2012 election cycle–$86,950 in this election cycle so far, according to figures provided by the Center for Responsive Politics. Reynolds, like DeWitt a pillar of Ohio’s GOP establishment, is on the roster of Romney for President. Each donated almost half a million dollars to GOP candidates and committees from 1990 through 2006, according to CRP.

It is no surprise that longtime local businessmen and state GOP honchos would be GOP donors as well.  But donations are only a small part of the story. Straight-out donations pale particularly in comparison to what Reynolds and DeWitt did for George W. Bush, in both business and politics.

The story is long, chock-a-block detailed, and has been written about elsewhere. Condensed, it reads as the story of a political-financial relay team, members effectively poised at each juncture of George W. Bush’s career to hand him the life-saving water bottle or more significant resource, primarily financial backing and political apparatus. A few quick examples of many:

  • In the mid-1980s, Bush’s oil exploration company was bailed out by Reynolds and DeWitt.
  • Also during the 1980s, DeWitt and Reynolds were among the Ohio investors brought in to back Bush’s purchase of the Texas Rangers baseball team.
  • GWBush received $42K year in consulting fees from Harken Energy, backed by Reynolds and DeWitt.
  • The relatively unknown Harken Energy also received a surprising opportunity to drill in Bahrain.
  • DeWitt was Bush’s partner in the Texas Rangers venture.
  • Reynolds was national finance chairman for the 2004 Bush-Cheney presidential campaign.
  • Reynolds co-chaired Bush-Cheney’s presidential inaugural committee.

 

Oil rig, Ship of state, the bloody son

For the record, Reynolds became GWBush’s ambassador to Switzerland and Lichtenstein, 2001-2003. A reward of ceremonial appointments, however, is dwarfed by the favorable tax policy bestowed by the Bush administration on long-time Bush cronies and their companies. 

As with Romney and his Olympics stint, Bush was able to base a claim of business experience on his Texas Rangers. As with Romney and Bain’s dealings with Bank of New England, Bush was able to get significant taxpayer help–Texas taxpayers and the City of Austin provided the stadium where Bush’s baseball team played. And as with Romney and some failed former Bain companies, Bush exited some companies carrying away gain for self while leaving the losses for others. It’s been called “vulture capitalism” for a reason. We could call them vulture political scions.

Candidate Romney on YouTube

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YouTube, we are here

Some 2012 unforgettable Romney YouTube moments

We may live in an age of information overload. But overload or no, surely the string of special moments loosed like chemical by-products by the Romney campaign will not soon be forgotten.

Just for fun, if nothing else–here they are, courtesy of YouTube, with slight annotation.

Hearing Romney out on the campaign trail, one sees why he has spent so much time touring mainly among fundraisers. Anyway, here he is, introducing running mate Paul Ryan as the next president: http://www.youtube.com/watch?v=th93Kko9ySE 

Romney with Ryan

Uncle Sigmund, call your office. Of course, everyone makes the occasional slip of the tongue. Here’s one where Romney tries unsuccessfully to accuse Obama of raising taxes:

http://www.youtube.com/watch?v=EAYz6ilQ6aU&feature=relmfu

He keeps having problems with Ryan, too. Here’s the one where Romney tries to get a crowd to chant his name along with Ryan’s. It makes even Joe Scarborough cringe: http://www.youtube.com/watch?v=SclDiN-lcYE

Then there are the deeper problems than tongue-twisting, like when he gets caught out in a misstatement. Here is Romney on money in politics, and on not hiring lobbyists:

http://www.youtube.com/watch?v=W_pgfWK3sxw&feature=related

 

Romney advisor Ron Kaufman

Some of the same moments again, in a flat-footed misstatement on his lobbyist-strategist (Ron Kaufman):

http://www.youtube.com/watch?v=kVA2Tr_GTlk&feature=related

Out on the campaign trail in New Hampshire, Romney puts his foot in it with a gay Viet vet:

http://www.youtube.com/watch?v=_H9FKfECKDk&feature=related

In related vein–Romney, queried for comment when a gay soldier is booed, waffles:

http://www.youtube.com/watch?v=ZU5-2rdAfG8&feature=related

Equally sensitive, here is Mitt “I don’t think I’ve ever hired an illegal in my life” Romney:

http://www.youtube.com/watch?v=OpD8yb5JR7Y

 

Perry, Romney

I envy Rick Perry. He brought out the best in Romney, in a sense. Here’s the $10K bet moment:

http://www.youtube.com/watch?v=uTpgTKAL_4k 

To be fair, there’s also an embarrassment of riches when Perry tries to get Romney on flip-flopping. His heart’s in the right place, tongue not so much:

http://www.youtube.com/watch?v=47kZofrFwQ0

But if you wanted Romney clarified, the go-to guy is his own strategist. The strategy? Etch-a-Sketch:

http://www.youtube.com/watch?v=X6NArPUFLRI 

Simple greatness. Even Newt Gingrich and Rick Santorum fielded that one:

http://www.youtube.com/watch?v=qlhmzzfU8G4

http://www.youtube.com/watch?v=3fvQbQysfdU&feature=related

 

Building on the great Etch-a-Sketch reveal, human history gets the infamous “47%” video:

http://www.youtube.com/watch?v=XnB0NZzl5HA 

Romney attempted to explain away his “47%” comments the night they were revealed:

http://www.youtube.com/watch?v=mhfmvuPHkZI

But move over, Mother Jones. Nobody beat up on Romney as well as Ron Paul’s people. Take this segment on the size of Romney’s typical audiences on the campaign trail:

http://www.youtube.com/watch?v=3GkR4dIHKKE&feature=related

 

Romney event

Romney’s own take on why he stumbled so many times in the campaign? “I think it’s about envy”:

http://www.youtube.com/watch?v=qudG6xS1M5o 

As Romney reminds us, “those people who’ve been most successful will be in the one percent.”

But charitably overlooking the man’s immense wealth gets a little hard when the candidate himself single-handedly produces a whole album of out-of-touch moments. Here are the top ten:

http://www.youtube.com/watch?v=lFUUDrh9wNg&feature=related 

 

Compilations of Romney gaffes are fun, and convenient. Here, a trio:

http://www.youtube.com/watch?v=ZIjcF4DgFy8

http://www.youtube.com/watch?v=cU0MVdq_ioQ

http://www.youtube.com/watch?v=SH–Y0ZjBS0&feature=relmfu

 

And to wind up, here is a nice compilation of Romney misstatements about the Obama administration, with video rebuttal:

http://www.youtube.com/watch?annotation_id=annotation_925350&feature=iv&src_vid=EQwrB1vu74c&v=Bg6S1HOo0j8

 

Enjoy your weekend–and remember where it came from, the not-Romneys of the world.

Debating against an Etch-A-Sketch

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Debating against an Etch-A-Sketch

How could cutting federal programs and cutting taxes ‘grow the economy’?

It was Gov. Mitt Romney who said, last night, that he would not reduce taxes for high-income individuals. It was Romney who said, “I’m not looking for a $5 trillion tax cut.” Romney repeatedly said he does not favor a tax cut for the rich. It was Romney who first said, “We have to have regulation” in the financial sector, adding that we can’t have people opening up a bank in their garage. Romney said, “I’m not going to cut education funding.” It was Romney who repeated–shades of George H. W. Bush’s “read my lips”–that he would not, underscore not, pursue any tax cut that raises the deficit. Romney’s own words: “My plan is not to put in place any tax cut that will add to the deficit.”

Romney, before first debate

Let’s set aside for a moment any questions about the truth content of the statements. The immediate observation for me last night–watching the televised debate, with estimable moderator Jim Lehrer, on C-Span–was Romney’s acute defensiveness.

He’s right to be defensive, of course. Romney and Paul Ryan, his running mate, have between them produced hundreds of utterances exactly the reverse of the foregoing. A quick run-down, quickly pulled off the top from a mountain of examples:

  • Ryan’s tax plan as originally published supports eliminating the capital gains tax entirely–along with all taxes on interest, dividends, and inheritance
  • Romney’s own tax plan, updated under fire, retains the George W. Bush tax cuts for the wealthy
  • Romney’s tax plan additionally cuts individual income tax rates in yet-unspecified ways
  • Romney’s tax plan, like Ryan’s, also eliminates taxes on investment income, eliminates any taxes raising revenue in the health reform legislation, and eliminates the estate (inheritance) tax–a provision that benefits himself greatly
  • Romney and Ryan have both repeatedly proposed lowering the corporate income tax rate, claiming that U.S. corporations pay higher taxes even when news reports and other analysis show top companies paying no income tax in a given year
  • as to education, both Romney and Ryan want to repeal the American Opportunity tax credit for higher education
  • Romney’s tax plan calls for repealing the refundability of the child tax credit and for repealing the expansion of the earned income tax credit (EITC)
  • in another sop to private companies making money off students and parents, Romney supports allowing students receiving federal aid, such as students with disabilities, to use their aid to pay for private schools (“school choice”)

 

Romney

The truth content of any statement by Romney on the campaign trail is up for grabs. The bigger the audience, the more up for grabs.

A reasoned assessment of candidate Romney’s statements as harbingers of future policy under a Romney-Ryan administration might note some of the things Romney did not say.

  • Although Romney said last night (defensively) that he would close loopholes in the tax code, as President Obama pointed out, Romney did not clarify what loopholes or deductions he might close. Romney implied that he would close loopholes or eliminate deductions that benefit the wealthy but did not say which.
  • Romney did not mention George W. Bush. Romney’s repeated assertion that he will not “cut” taxes for the wealthy leaves in place the previous cuts passed under the Bush administration.
  • Romney said that he would “replace” Dodd-Frank but did not say how he would replace the legislation or with what.
  • Romney did not mention congressional Republicans, by name or by specific policy. This was politic. Candidate Romney cannot castigate the president for ‘slow’ economic recovery from the worst economic event since the Great Depression, if people remember that everything the Obama administration has tried has been opposed by Sen. Mitch McConnell (R-Ky.), Rep. John Boehner (R-Ohio) and Rep. Eric Cantor (R-Va.).
  • Come to think of it, Romney did not mention by name any top Republicans now running for office or for reelection. He did not mention even his own running mate, Paul Ryan–also running for Congress–until the president mentioned him in connection with Ryan’s Medicare proposals. Possibly Romney less than pleased with some of Ryan’s recent criticisms of his gaffes.

Ryan and Medicare

As said, more than a trifle defensive, and understandably so. By all accounts, Romney came into last night’s debate pretty much on his own–though he will benefit from the predictable spin by the right-wing echo chamber, always ready to scare the timorous. (A glance at headlines shows they’re already double-standarding the president on defensiveness.)

Diagram of weather vane

Back to the debate–before leaving this quick sketch of not-mentioned’s, one final item.

On reducing the deficit, candidate Romney said, “I have my own plan.”

From the transcript:

LEHRER: Governor, what about Simpson-Bowles? Do you support Simpson-Bowles?

ROMNEY: Simpson-Bowles, the president should have grabbed that.

LEHRER: No, I mean, do you support Simpson-Bowles?

ROMNEY: I have my own plan. It’s not the same as Simpson- Bowles. But in my view, the president should have grabbed it. If you wanted to make some adjustments to it, take it, go to Congress, fight for it.

OBAMA: That’s what we’ve done, made some adjustments to it, and we’re putting it forward before Congress right now, a $4 trillion plan . . .

ROMNEY: But you’ve been — but you’ve been president four years…

(CROSSTALK)

This is a perfect example of (some of) the most infuriating GOP tactics. It’s Romney’s kind of syllogism. One, the president should have supported Simpson-Bowles. Two, I am not supporting Simpson-Bowles and am not saying how I differ. Three, the president should have supported Simpson-Bowles.

No mention, no mention whatsoever, of congressional Republicans’ obstruction of every social and fiscal proposal for the last four years. No mention of their stated determination to keep Obama from doing anything to improve the economy or to reduce the deficit–since that would enhance his chances of reelection.

Mitch McConnell

It is a relief, in a sense, to turn from Romney’s omissions and outright lies to some moments of clarity. Here are a few:

Romney stated repeatedly that he will support “no tax cut that adds to the deficit.” He also referred repeatedly to balancing the budget. “My plan is not to put in place any tax cut that will add to the deficit. That’s point one.”

When Obama said, “Romney has ruled out revenue” in deficit reduction, and Lehrer asked Romney to respond to the statement, Romney agreed.

Romney repeatedly referred to shifting federal programs to the states. Romney stuck with the idea of turning even Medicaid over to states, even when Obama rightly criticized it.

Fifty fiscal cliffs?

Obviously, if you push the costs of federal programs on to the states by turning over federal programs to states, you–so to speak–reduce the federal deficit. You also produce a 50-state version of the fiscal cliff. I am hoping no sane person anywhere to the left of Louis XVI goes along with this. Romney’s idea, in case anyone missed it, amounts to turning health care over to the states, turning veterans’ benefits over to the states, turning Medicaid over to the states. Does anyone envision the state of Alabama, or South Carolina, getting insurance companies to provide actual health care coverage–either for poor people or for anyone else? How about the state legislatures of Tennessee or Kentucky? Have they made the insurance industry play ball? When? Are they provided with the laws-with-teeth it takes to exact sizable fines from large companies committing fraud, including insurance companies that defraud? Do they even have the resources to prosecute multi-state fraudsters?

On Medicare, another moment of clarity. From the transcript:

LEHRER: All right. Can we—can the two of you agree that the voters have a choice—a clear choice between the two . . .

ROMNEY: Absolutely.

LEHRER: . . . of you on Medicare?

ROMNEY: Absolutely.

OBAMA: Absolutely.

Explaining

Now to some clearer statements from Romney.

From the transcript:

“I don’t want to cost jobs. My priority is jobs. And so what I do is I bring down the tax rates, lower deductions and exemptions, the same idea behind Bowles-Simpson, by the way, get the rates down, lower deductions and exemptions, to create more jobs, because there’s nothing better for getting us to a balanced budget than having more people working, earning more money, paying more taxes. That’s by far the most effective and efficient way to get this budget balanced.”

From the transcript:

“So how do we deal with it? Well, mathematically, there are three ways that you can cut a deficit. One, of course, is to raise taxes. Number two is to cut spending. And number [three] is to grow the economy, because if more people work in a growing economy, they’re paying taxes, and you can get the job done that way.

The presidents would—president would prefer raising taxes. I understand. The problem with raising taxes is that it slows down the rate of growth. And you could never quite get the job done. I want to lower spending and encourage economic growth at the same time.

What things would I cut from spending? Well, first of all, I will eliminate all programs by this test, if they don’t pass it: Is the program so critical it’s worth borrowing money from China to pay for it? And if not, I’ll get rid of it. Obamacare’s on my list.”

For my money, this is the place to arrive, for anyone who wants to evaluate the somewhat slippery Romney’s vision for the future. The statements just quoted come as close as anything can to Romney’s core principles.

They also amount to a Get-out-of-jail-free card for candidate Romney. You see, it’s number [three], ‘growing the economy’, that works the magic. Growing the economy will produce jobs; more jobs will mean more taxes paid by working people–we just recently heard Veep nominee and congressional candidate Ryan expressing concern about that; and more taxes from working people will mean reducing the deficit.

And how will Romney ‘grow the economy’? We’ve heard it before. He will cut taxes and cut federal programs.

This is the game plan. Forget repetitions of the potent word ‘jobs’. Forget touching anecdotes about a few individuals. Forget claims of supporting the middle class. Cutting taxes and cutting federal programs will grow the economy, and that will take care of all our other problems.

And what if it doesn’t work?

[Update]

Romney’s debate performance is spawning numerous fact-based rebuttals. This one  from Daily Kos is representative.

[          ]

 

Mitt Romney’s tax policy, corporate taxes, and (almost) everybody else’s

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Mitt Romney’s tax policy, corporate taxes, and (almost) everybody else’s

Following up on the last post, this time focusing on corporate rather than individual tax provisions–

As stated earlier ‘loophole’ is an elastic term, defined as well as anywhere 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.

Simple question: What tax loopholes do large corporations benefit from most?

The answer is less quick than with the earlier post on loopholes for wealthy individuals and for individual tax returns. More tax loopholes and related tax devices are available to corporations than are available even to individuals of wealth. Corporations, after all, can bring more pressure to bear on legislatures and can push back more on regulatory agencies than even wealthy individuals can.

However, one quick answer up top is almost blinding in its simplicity: large corporations are allowed to declare ‘losses’ for tax purposes when they are over-all not suffering losses. Writing off costs is one thing. Cost, as we learned in high school economics, is the difference between gross (income/earnings) and net. Subtract your costs from your gross receipts, and you’ve got your profit. But writing off paper losses on bucketsful of money, on an over-all net gain for the company, is just avoiding taxes multiple times.

Shuffling income into and out of Ireland, and onto lovely islands, also helps large companies avoid taxes. In one of numerous examples, Bloomberg News reported in 2010 that Google cut its U.S. taxes by $3.1 billion over three years by moving money to Bermuda via Ireland and the Netherlands. Citing regulatory filings in six countries, the Bloomberg report estimates Google’s effective overseas tax rate at 2.4 percent. Google beat all its competitors at the game, a complicated but legal system of funneling money into and out of Irish subsidiaries and thence into known island tax havens. The maneuvers are so well known to tax accountants that they have their own comic-book gangster-style names–the ‘Double Irish’ and the ‘Dutch sandwich’.

It would be good to find out which corporate tax loopholes Mitt Romney would favor closing. Candidate Romney is fond of justifying lower taxes on capital gains by saying that that income has already been taxed, presumably meaning at the company level. It might be more accurate to say that the money being parked offshore, taxed at the lower capital gains rate, or otherwise tax-sheltered by wealthy individuals–company employees or former employees like Romney–is money that has already avoided taxation. (Romney has supported eliminating the capital gains tax altogether.)

In any case, Bloomberg cites an estimate that the United States Treasury loses $60 billion a year through these maneuvers. The key tactic here is known as “transfer pricing”, ” paper transactions among corporate subsidiaries that allow for allocating income to tax havens while attributing expenses to higher-tax countries.” Again, it would be good to know whether Romney favors eliminating transfer pricing for the purpose of allowing U.S. corporations to avoid U.S. taxes. Many of our candidates for office are fond of calling for simplifying and clarifying the tax code. Surely a more rational, more straightforward and clearer tax law would simply shut down the offshore tax havens–that is, simply disallow the claim of a post-office box and a brass plaque in the Caymans as a ‘subsidiary’, ‘branch’, ‘shell’ or any other (legal) division of a company for tax purposes.

Moving from Google to one of its chief competitors–

Reuters reported in 2011 that Microsoft reported only $445 million in taxes–U.S. and foreign–on $6.3 billion in profit, for fiscal fourth quarter. The way Microsoft worked this tax magic? Simple: “It is increasingly channeling earnings from sales to customers throughout the world through the low-tax havens of Ireland, Puerto Rico and Singapore.”

The tactic is deliberate; Microsoft increasingly has declared its earnings abroad, more and more, and in the U.S. less and less, over a period of years.

“The change is fueling its shrinking tax bills. According to its 2010 annual report, by keeping a good chunk of foreign earnings away from the U.S., Microsoft has accumulated $29.5 billion overseas–and that is before the impact of its last financial year.”

The non-profit USPIRG issued a report on tax havens this year. Keeping its recommendations short and sweet, the report urges, “Close corporate tax loopholes.”

Executive summary:

“Some U.S.-based multinational firms or individuals avoid paying U.S. taxes by transferring their earnings to tax haven countries with minimal or no taxes. These tax haven users benefit from their access to America’s markets, workforce, infrastructure and security; but they pay little or nothing for it—violating the basic fairness of the tax system and forcing other taxpayers to pick up the tab.

Even when tax haven abusers act perfectly legally, they force other Americans to shoulder the burden in a variety of ways. The taxes they don’t pay must be balanced by other Americans paying higher taxes, coping with cuts to public spending priorities, or increasing the federal debt.

Congressional studies conclude tax haven abuse costs the United States approximately $100 billion in tax revenues every year. Multinational corporations account for $60 billion and individuals the rest.” [emphasis in original]

 

Federal tax subsidies for corporations

Many of our worst candidates are also fond of talking about ‘entitlements’, usually referring to the supposed presumptuousness of the poor. The same candidates never mention corporate entitlements. As the non-profit Citizens for Tax Justice reported in 2011, more than half of all U.S. government subsidies go to only four industries—financial, utilities, telecommunications, and oil/gas/pipelines. From 2008 to 2010, 56 percent of all tax subsidies went to these four industries.

The sheer size of the subsidies is staggering. Wells Fargo topped the list with $17.9 billion in tax subsidies in 2008-2010 (p. 6, numbers given in millions). AT&T came in second with $14.5 billion in tax subsidies for the same period. Verizon third, GE fourth, IBM fifth, ExxonMobil sixth. Over-all, Citizens for Tax Justice studied earnings and taxes for 280 top companies and reported, “Tax subsidies for the 280 companies over the three years totaled a staggering $222.7 billion ($61.4 billion in 2008, $76.2 billion in 2009 and $85.1 billion in 2010).”

One result is that 37 top companies paid no federal income tax in 2010 (p. 18). These companies, be it noted, include major federal contractors such as GE and Boeing. In 2009, 49 top corporations paid no income tax, including Halliburton, Wells Fargo, GE and Verizon (p. 19). In 2008, 22 top corporations paid no income tax, including GE, Eli Lilly and Goldman Sachs (p. 20). Goldman, of course, suffered huge losses in the mortgage-derivatives debacle, and 2008 was a bad year.

2008 was not a bad year for the oil companies, however. This little-emphasized fact makes the extensive federal subsidies for Big Oil particularly galling. In Q3 2008, when everything else was hitting the fan, or about to hit the fan, ExxonMobil reported receiving the highest quarterly profit ever recorded by a U.S.company. As CNN reported at the time, “Exxon Mobil, (XOM, Fortune 500), the leadingU.S. oil company, said its third-quarter net profit was $14.83 billion, or $2.86 per share, up from $9.41 billion, or $1.70, a year earlier. That profit included $1.45 billion in special items.”

The company’s previous record had been the previous quarter. The $14 billion quarterly net came despite losses from Hurricane Ike and the Exxon Valdez oil spill.

“The company’s earnings were buoyed by oil prices, which reached record highs in the quarter before declining. Oil prices were trading at $140.97 a barrel at the beginning of the third quarter, and had fallen to $100.64 at the end.

“Compare that to 2007, when prices traded at $71.09 a barrel at the beginning of the third quarter, and rose to $81.66 by the end.”

Predictably, ExxonMobil continues to report record profits to the present day. The other oil majors are following suit.

Federal help for oil companies is quite the anomaly, to put it nicely.

  • Astronomical profits for Big Oil do not typically pass along to the consumer. As company profits have risen, the price of gasoline at the pump has not declined proportionately. When ExxonMobil profits increased more than $5 BILLION in one year–an increase of 35 percent from one year to the next–gas prices did not decline 35 percent in the same year. The average price of gasoline, according to Department of Energy (DOE) statistics, went down about 22 cents in the same period, a price decline of less than 8 percent. Profit up by 35 percent, gasoline down 8 percent–and that’s without factoring in the cost to the nation of the then-decline in U.S. automobile sales, the consequent unemployment and decline in company benefits, and pressures on home mortgages from high fuel prices. The people who profit most from Big Oil’s relaxed tax burden, by the way, tend also to be the people who opposed the Obama administration’s rescuing the auto industry.
  • Numerous reports have indicated by now that one of the big factors affecting the price of gasoline at the pump is not supply of crude oil, but speculation. Again, the same individuals and entities who opposed helping Detroit also oppose reining in speculation in commodities including fuel.
  • Meanwhile, every statistical record also indicates thatU.S.consumers are reining in demand, as Americans curtail trip-taking and errand-running and turn to more fuel-efficient vehicles where they at all can do so. Thus, whatever the ‘law of supply and demand’ might seem to dictate, it has not dictated that a combination of record profits for the oil companies, falling demand by consumers, and lower price of crude oil bring about a concomitant decline in prices at the pump.
  • What is said here about gasoline prices also pertains to the price of home heating fuel.

Any time the price of filling up the tank goes down–generally as a function of market vagaries including speculation–the decline tends to blunt public outrage over high fuel prices, overpaid CEOs, and astronomical oil company profits. However, public support for better use of energy resources including conservation measures, and public support for a windfall-profits tax for the oil companies, have trended upward.

Max Cleland

Unfortunately, this is one place we need real political leadership, and that takes courage. Former Sen. Max Cleland (D) of Georgia tried to bring about public awareness of high petroleum profits. Cleland even held a hearing on manipulation of prices in the transportation sector–a rarity in the Bush years, in Washington. Cleland’s reward? The petroleum industry poured record donations into the coffers of challenger Saxby Chambliss (R), who used some of the money on campaign ads linking Cleland–a decorated disabled Vietnam War vet–to Osama bin Laden.

Chambliss

It is useless to hope for improvement through, or from, the Republican Party. Republican candidates continue to campaign solemnly on promises to cut top tax rates, exhort their audiences to reduce the corporate tax rate, and talk about eliminating capital-gains and estate taxes. Herman Cain even wanted to substitute an across-the-board sales tax of 9 percent for progressive income tax rates. Their well-paid spokespersons in large media outlets—commentators like George Will and David Brooks—blamed the subprime mortgage debacle on poor people who bought bigger houses than they could afford. (Now they tend not to mention it.) The GOP heads in Congress, Boehner and McConnell, falsely characterize every regulation (safer mines, cleaner air) as ‘job-killing’. They also obstruct every effort to bring tax cheats to justice, or at least big-donor tax cheats, corporate as well as individual.

More potential questions for Mr. Romney as candidate. Perhaps tomorrow night’s televised debate will at least touch on some of these issues.

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.