Romney: Myths, the Misses, and Impossible Mathematics

Frankly, I’m rather tired of the whole “Show me your tax returns” sideshow that has taken place lately. The problem with Mr. Romney is the same problem that occurred while George Bush was in office. There are just so many myths (Bane-when did he leave?), the misses (Mrs. Romney), and impossible mathematics (tax policy) taking place, seemingly every day, that one never has time to tackle one before another would spring up. A White Board Mr. Romney? Really?

But, I do think Mr. Romney should release those tax returns if for no other reason than he wants a job and any good employer knows better than to hire someone without running credit checks and background checks. I can just imagine saying to a board of directors looking to hire me as CEO:

“Awww, just trust me; I’ve never done anything illegal, ok? Now let me run your company, thanks!”

Even I have had to be prepared to turn over credit reports, tax returns, etc., when I applied for jobs. Mr. Romney wants to, at least in title, represent every man, woman and child in America. In essence, he wants us to give him a job but is clearly neither comfortable nor accustomed to having to prove that he is worthy of that job.

Mrs. Romney’s Growing Impatience With “You People”

Then there’s Mr. Romney’s wife, Ann. She is clearly perturbed that “you people” have the audacity to continue to question them. Do “you people” know who you are talking to? Well, based on his wife’s reactions to the requests for any kind of information, it’s pretty clear she’s never had anyone dare to “back-talk” the lady of the house…OR had a job in her life. Oh, wait, there’s that homemaker “job” that she’s had that she’s is so proud of. The right-wing media stoked that fire with faked outrage that anyone would dare imply that being a homemaker isn’t hard work. But one has to wonder how many nannies, drivers, cooks, maids and personal shoppers she’s had to “help” her with those arduous chores of raising those fine boys and managing that household over the years. My guess is she’s never changed a diaper, cooked a meal, taken the boys to and from school, or cleaned up vomit when they were sick. No, I can’t see Mrs. Romney getting those hands dirty, much less working those multi-million dollar fingers to the bone.

Romney Makes His Own Tax Return Problems Worse

My personal preference is that Presidential candidates should be required to disclose their last ten years’ tax returns to the public so that we can judge for ourselves if these guys are 1) trustworthy, or 2) just how badly our tax laws are written. If we want to pass a law requiring future presidential candidates to do so, then let’s do it and be done with it. But this sort of sniping back and forth between campaigns isn’t accomplishing a dad-gum thing.

Even worse, Mr. Romney is so out-of-touch with reality, that just when the whole argument was finally winding down, he came back and said yesterday in South Carolina, “I did go back and look at my taxes, and over the last 10 years, I’ve never paid less than 13 percent.”

Wow, 13 percent. I work for a living and pay 25 percent. Boo-hoo Mr. Romney. Unfortunately, that raises yet another  question…“Well, then, why won’t you simply prove it Mr. Romney?”

I honestly find it hard to believe that Romney has paid more than 13 percent every year. We know that Romney paid 13.9 percent in 2010 taxes, but Romney’s taxes primarily came from income from investments. Well, the markets and the global economy collapsed in 2009. Romney should have had big losses to deduct for that year. It just doesn’t pass the stink test.

Pure logic dictates that it is extremely improbable that he paid 13 percent in 2009, but it’s equally improbable that he paid zero for 10 years straight with Mr. Romney’s level of income; regardless of his financial sources. In normal political style, however, Mr. Romney never specified “what” he paid 13 percent taxes on. If you look at taxable income, of course he paid 13 percent tax of one sort or another on his taxable income, but that’s a meaningless base on which to measure an effective tax rate. It’s circular logic.  All Americans pay fuel tax, sales tax, state taxes, etc. Mr. Romney, with his mammoth real estate holdings must pay as much in real estate taxes as some small cities.  The only base that matters is Mr. Romney’s adjusted gross earned income, because that is the actual foundation for calculating INCOME TAXABLE income. We know he paid zero tax at the capital gains rate in 2009, because his 2010 income tax return (although incomplete) showed that he had loss carryovers for 2010 that could have only come from 2009.  So he must have had ridiculously low adjusted gross income (AGI), relative to his economic income for the year.

When he says he paid more than 13 percent every year for the past 10 years, it’s my informed opinion that he is referring to the rate he paid on his taxable income as opposed to his AGI. That would make it easy for him to say that he paid more than 13 percent, but he wouldn’t have paid more than 13 percent by the normal standards of accounting.

Then there’s the possibility that he paid taxes in some other legal entity such as an LLC (Limited Liability Corporation). There are endless configurations that can be manipulated and I think that is the heart of the problem. Do I have proof this is what he’s doing ? Of course not. But there’s no proof he’s not doing it either, which is why people want Romney to actually release the returns: Then we can quit guessing. Mr. Romney simply saying numbers or percentages concerning what’s in the returns doesn’t really tell anyone anything.

For now, the only thing we know for sure about Mr. Romney’s tax returns is that he won’t release them from before 2010, which suggests that there’s something he would very much prefer the media and the public doesn’t see. As I said at the top of this post, it’s his legal right to keep them secret.  It’s also the public’s right to refuse to elect someone so secretive, so arrogant, and lived so privileged a life as to feel that he doesn’t have to provide “you people”  with anything he doesn’t feel like providing.  But he can’t simply refuse to release the same returns all recent presidential candidates have released, and expect that people will simply trust that there’s nothing weird going on in them.

Earlier this month, in an interview with Fortune Magazine, Mr. Romney responded to the Tax Policy Center’s analysis of his tax plan. Mr. Romney, in responding to a question about the analysis said:

“I indicated as I announced my tax plan that the key principles included the following. First, that high-income people would continue to pay the same share of the tax burden that they do today. And second, that there would be a reduction in taxes paid by middle-income taxpayers. Those are the key principles of my plan that the Tax Policy Center chose to ignore.”

Well, it turns out that the Tax Policy Center didn’t actually “ignore” anything including the principles to which Mr. Romney erroneously referred. The Tax Policy Center tried to test them, and the mathematics simply failed.

Moreover, they failed for a rudimentary reason. That reason is that the tax cuts Romney is promising the rich are larger than all of the available cumulative tax breaks (loopholes) Mr. Romney can close to offset them. Ergo, if the plan is going to be revenue neutral, as Mr. Romney has promised, it is mathematically impossible for it to do anything but shift the tax burden away from the rich and onto the middle-class and working poor.

It’s worth noting that Romney’s response to this plan is, plainly, that the Tax Policy Center refused to believe that he would do what he said he would do…you know, that mathematically impossible thing Mr. Romney promised to do. Now, there’s no doubt that Mr. Romney has a lot of very smart economists and policy thinkers who put these ideas, if not the words, into his mouth. Had any of them come up with a better argument, it’s my humble speculation that Mr. Romney would have used it. But that’s just me.

Mr. Romney insisted on talking himself into another logic black hole by continuing:

“Instead they (The TPC) made various assumptions about what they thought I would do which are not in fact accurate. They made an assumption that I would reduce the home mortgage-interest deduction. I will not do that for middle-income taxpayers, as I have already indicated.”

Ok, so now I’m really confused. Mr. Romney, who has refused to officially name even one offset for his tax cut, and has taken the largest, most-used, middle-class tax deduction, mortgage-interest paid, off the table.  So in his 10-year deficit-reduction plan, he has steadfastly refused to name a single spending cut essential to hitting his targets, but he has taken Social Security, Medicare, defense, and now the single largest middle-class income tax deduction off the table! That is some fancy math.

Please help me understand exactly how I’m supposed to believe a presidential candidate who:

  1. Has systematically ruled out cuts to the largest and most popular government spending programs
  2. Has ruled out eliminating the largest middle-income family’s tax deductions (mortgage interest paid)
  3. But is nevertheless going to be able to find spending cuts that will offset tax reductions equaling $265,000 for every one of the 5.2 million millionaires in the U.S.

I’ll say it again. Mr. Romney’s mathematics aren’t just fuzzy; they’re impossible. But please, don’t tell Ann I said so.  She gets very indignant at “us people.”

Harvey A. Gold

Enhanced by Zemanta