Yes, that Kevin Drum.
When Kevin talks, I always listen, and so should you. But he just completely misses the point about Harry Reid when he says that Reid is “making stuff up in order to put pressure on Romney, and I think we all know it.”
Can I prove this? Of course not. Given the epistemological limits of proof, I can’t prove Barack Obama was born in the United States either. Nevertheless, I feel safe saying that anyone who claims to have an “extremely credible source” that Obama was born elsewhere is either crazy or lying. The same is true for Reid, and Reid isn’t crazy. It’s simply vanishingly unlikely that he’s telling the truth, and no one — not liberal or conservative — would spend even ten seconds on a story so patently far-fetched if it were anybody but Reid and the background were anything but the frenzy of a presidential campaign….
Take a deep breath, folks. This is contemptible stuff and it’s not just business as usual. We’ve spent too many years berating the tea partiers for getting on bandwagons like this to get sucked into it ourselves the first time it’s convenient. It’s time to quit cheering on Reid and get off this particular bus.
Where to start? Well, first, although Kevin thinks that Reid must be making this up, he doesn’t know that. Reid says that he knows someone who says that Romney paid no taxes. “Really?” asks Kevin. “Does anyone really believe this?” Uh, yeah Kevin: I do. That doesn’t mean I think that the source is right, but do I think that there is a source, and the source is making these claims? Yes. Do I think that it is plausible — not definite, but plausible - that, when pitching someone to invest in Bain, Romney privately boasted that not only are the investments great, but they can avoid taxes, “and I know because I haven’t paid taxes in 10 years”? Yes. Do I think that it is plausible — not definite, but plausible — that Bain partners screwed out of a lot of their money by CEO/Not-CEO/Chairman/Not-Chairman Romney might be a little ticked at him, and inclined to make claims that they might have some information about? Sure.
Second, let’s think for a moment: what if Reid actually were making up this source? So what? As I pointed out beforehand, Romney has the evidence that Reid or his supposed source is wrong, and it is totally reasonable to ask Romney to release his taxes as have all candidates for the last 40 years. Kevin’s own analogy — whether Obama was born in the United States — proves the point. What makes the birthers so outrageous are two things. First, they seem to believe that Obama was not born in the United States because, well, people whose middle names are “Hussein” aren’t born in the United States. The racial subtext of this is so obvious that to compare it to Romney’s taxes misses the whole context.
But more to the point, Obama did what everyone is telling Romney to do, and the birthers went right ahead. The state of Hawai’i showed everyone his birth certificate, in 2007, and the “birthering” continued. The appropriate analogy is if Romney released his returns, and critics insisted without a shred of evidence that he had forged them. That would be the birther equivalent, and it would be wrong. And it is not what is happening here.
Drum’s peroration underlines the weakness of the claim. He says that “this” is contemptible stuff and criticizes the Tea Party for jumping on bandwagons like “this.” But what is “this”? What precisely is contemptible? That Reid is using a more specific claim to get Romney to do something that every candidate for the last 40 years has done? That he has made his claim more specific? That instead of saying “I bet Romney paid no taxes” he is saying “someone credible told me that Romney paid no taxes”? When Romney himself could disprove it easily by simply adhering to the same rules of conduct that everyone else does? That is what is so contemptible? In an election being waged over the attempt to create permanent plutocratic/theocratic domination of the country?
The pearl-clutching must stop.
Free Kevin Drum!
This. 100 times this.
I read Kevin Drum every day. Every post, without fail. Because I love his work. But Jesus.
This is why the Democrats will always be chumps and the US political centre will continue its slow walk to the far-right. Because at nearly every critical moment when common sense and political spine needs its standard bearers on the left side of the isle, they all get the vapors and make the pure the enemy of the good.
Well, first, although Kevin thinks that Reid must be making this up, he doesn’t know that. Reid says that he knows someone who says that Romney paid no taxes. “Really?†asks Kevin. “Does anyone really believe this?†Uh, yeah Kevin: I do.
You missed Drum’s point. He, correctly, calls the arguments that you make sophistry. That’s because he understands that the only salient accusation being made is, “Romney paid no taxes for ten years.” The claim that someone told Reid that is irrelevant. If it turns out that that is the only thing that is correct, then Reid’s statement still amounts to a lie. Hiding behind “Someone told me” is weak. That’s a bullshit argument.
Now, maybe it’s valid to go ahead and make the charge, but spare me the crap about Reid’s statement being true if he really has a source that told him that. That is so fatuous that it embarrasses me that people I usually agree with are so shameless as to argue it. Either man up and hang your hat on the actual charge, or shut up.
And the argument that Reid is justified in making borderline ridiculous charges (and that’s what his charges are, when you dig into the likelihood of Romney actually managing to pay NO taxes over ten years) in order to pressure Romney into releasing his tax forms is equally contemptible. Either you are committed to condemning ridiculous charges or you aren’t. If you buy into the idea that this is the proper way to hold a political argument, then you have forfeited your right to complain about the ridiculous charges that come the other way. You have agreed that politics is an endeavor in which truth has no value as such.
And, yes, the idea that Romney paid NO taxes over a ten year period is ridiculous. Those of us who have spent years arguing against the idea that paying no income taxes equates to paying no taxes at all should think three or four times before deciding to just abandon that position when it conveniences us to do so. However, beyond that, the scenarios one has to concoct in order to make that claim even about income taxes are pretty far fetched. The most plausible one I’ve seen involves much of Romney’s income being tied to Bain Capital shares that he had contributed to his IRA being bought back at exorbitant prices, but even these scenarios only lead to Romney paying some very low rates, not no income taxes at all.
Jonathan, if you’re comfortable declaring that “low” is the same thing as “none,” have at it. If you’re comfortable making the argument that income taxes constitute all taxes, have at it. I, for one, actually value truth, and so I’m in Kevin Drum’s camp in saying that Reid’s statements, as he has made them, are so implausible as to the charges he is actually leveling that I have to opt out. If that means that I’m clutching my pearls, then so be it. However, I simply do not countenance making accusations that are false, even if the other side isn’t playing bean bag. In the long run, I think we only damage our interests by doing so.
Hmmn. I suppose I should add that, while I do believe everything I wrote above, I also think that liberals spending the next week exchanging loud, accusatory posts prominently featuring the claim that MITT ROMNEY PAID NO TAXES FOR TEN YEARS probably doesn’t have any downside, no matter how many of us are fainting while we participate.
I can’t remember the specific incident, but 6-7 years ago a major media figure was asked why the media didn’t call out George W. Bush and report on what was a clear, obvious, factual lie. His response was, in essence, ‘Our job is to report on both sides. If no major Democrat is saying that Bush is lying we can’t report on that. Get Harry Reid to say this is a lie; then we’ll have a story’ [yeah, I know, but that is what happens to the MSM after 40 years of “you’re a librul”]. So now Harry Reid is calling out a Republican in so many words and not only does the MSM not start digging into the story as they promised but the discussion swings around to whether _Reid_ is lying. Yeah, that’s really “contemptible stuff” by Democrats there. Really contemptible.
Cranky
BTW, Mr. Drum has suddenly backpedaled a bit:
= = = = =
http://www.motherjones.com/kevin-drum/2012/08/mitt-romney-and-his-mysterious-102-million-ira
I’m sticking to my guns on this, but there’s now a sliver of doubt. Today, for the first time that I know of, someone has produced a reasonable-sounding scenario that explains how Romney might have paid either zero or close to zero in income taxes for eight years. It’s related to Romney’s $102 million IRA, something that’s been tantalizing us ever since it showed up in his 2010 tax return. You can read it here.
= = = = =
Skip over pearl-clutcher Kevin Drum and go strait to the plausible-sounding theory for how Mitt Romney would have paid no taxes for ten years (while somehow amassing a $100 million IRA), thereby duping the American people out of millions of dollars of income that could have been used for infrastructure, education, health care, etc:
http://talkingpointsmemo.com/archives/2012/08/missing_the_key_issue.php?ref=fpblg
Kevin Drum has been doing this holier than thou line for years - and it’s one reason why I stopped reading him. I’ve got much more respect for David Corn, who actually does some hard work and digs out stories, than I have for a pearl-clutching Jon Stewart without the occasional good jokes.
Again, this is a theory for how Romney could have had a very low tax rate, but it is not a theory that leads to him paying no taxes.
I’m don’t think that it is ridiculous to think Romney didn’t pay income taxes during 10 of his 30 year working life for at least two reasons (as a lay tax payer). 1. Capital losses offsetting his capital gains which seem to represent a majority of his earnings at certain times. 2. Startup costs/business failures that could offset income via net loss carry forward.
I will concede that he probably did pay a sales tax somewhere.
I will also just say that being a very rich tax evader is obviously much more shameful than being a poor one. And that I still think this line of attack is entirely fair to Romney. Why would someone think they could run for prez and not cough up their tax returns??
You got my vote. And if you link to Josh Marshall’s post of an email that describes the possible mechanism, you’ll get a lot more.
I really don’t get all the pearl-clutching and the fainting couch. Mark and Kevin have earned their stripes by picking off blatant falsehoods coming from “the other side” (McArdle has not). But even they should recognize that the game must be played by the rules that are fair to both sides and, by those standards, Reid is far more within the rules than every ad the Romney campaign produced so far. So, sure, acknowledge that Reid is not playing by the standards of the Oxford Debate Society, but admit that this is how the game is played and let it go. No need to double down on moral superiority.
As a student in Oxford i didn’t go much to the Oxford Union debates, but on one of the occasions I did I heard Leofranc Holford-Strevens (sic) describe Douglas Hogg (later as a Tory Minister of Agriculture largely responsible for the BSE disaster) as “a shining wit - as Dr. Spooner might have said.” Fits Mitt Romney perfectly.
Oh, that was very well done.
Loverly!
Here’s the email from Josh Marshall’s reader, who worked in private equity for years and claims to understand exactly how a manager would pay no taxes:
TPM Editor’s Blog
Missing the Key Issue?
Josh Marshall August 7, 2012, 7:42 PM 15853
TPM Reader MB says we’re missing a key part of the Romney tax story …
I think you’re missing a key nuance from Romney’s denials and indignation here. Note that the response always appears to be “I paid a lot of taxes†and not “I paid a lot of income taxes.â€
Anyone making $10 to $20 million per year will pay a lot of taxes in absolute dollars — state taxes, property taxes, city taxes, sales taxes, etc. But the distinction you’re missing is whether or not these taxes were income taxes.
From my initial understanding (and I am no tax professional, but have 10 years experience in private equity and am familiar with how the senior professionals manage their finances), there’s a possibility that Romney paid very little (i.e. less than 10%) income taxes during the 2002 to 2009 period in many of those years. It is quite possible that some of those years could have approached zero. There’s a lot of different ways to make that happen, through standard structuring/gifting, offshore planning, charitable contributions, and favorable recent tax laws for carried interest and capital gains. I think you should try and pivot the discussion around “were these income taxes that Romney paid†and not “did Romney pay taxes.â€
Just a thought from looking at the nuances behind Romney’s replies to Reid — he appears to be very careful not to say “income taxes even when the initial claim by Reid was specifically around income taxes.â€
Here I responded (edited to remove iPhone abbreviations)…
Well even his ‘base’, as it were, shld be 15%, right? Wouldn’t almost all the income be structured as capital gains?
To which MB replied …
Yes, but you’re missing the piece on the timeline where Romney cut a retirement deal with his partners to buy out his shares in the Bain Capital management company. Where it could be zero is if Romney had previously contributed his shares of the Bain Capital management company that he controlled 100% of into his IRA over the years.
The corporate structure of most private equity firms is such that there is a management company (holding company) above a set of LLCs or limited partnerships which are the actual funds investing the capital and collecting the fees/distributing the profits. Romney was both a general partner in the funds and the sole shareholder of the management company.
The management company shares are generally considered to have relatively nominal value (i.e. you can conceivably put them into an IRA) as there generally isn’t a lot of (or any) income/revenue associated with them — however, since the management company owns the brand name and controls the funds and all hiring/firing/compensation decisions (within Bain Capital), if Romney’s partners wanted to continue using the name “Bain Capital†and take over control of the private equity firm and funds in the future, they would have to buy back Romney’s shares over a period of several years for hundred+ of millions of dollars. This is not uncommon in private equity firms undergoing an ownership transition. Since these shares (could) have been contributed to an IRA over the years, the Romney’s income 2002 to 2009 would largely be from his partners at Bain buying back shares that he’s already contributed to his IRA, and just like any trading you do in your IRA, the sale of these shares would be tax free until after he turns 65 (and/or withdraws from said IRA) and he’d pay zero income taxes on that. So, if he had transferred 50% of his Bain management co. shares to an IRA, if he was being paid $20M per year to have those shares bought back, his tax rate would be a blended 7.5%. If the management company shares were held overseas or had overseas blocker entities, it is conceivable it could be even lower than that. Also, he could use his taxable shares as charitable gifts and his non-taxable IRA shares as tax free income.
This is pure speculation — but I think you if you and your team worked a little harder talking to estate planning lawyers and trust experts who work with senior private equity partners and professionals (good luck getting them on the record, but it is really much more nuanced for private equity than your everyday run of the mill wealthy individual), you could sketch out a number of hypothetical situations and I think add more credibility to Reid’s position.
It’s entirely possible Romney paid zero income taxes, and possibly nominal capital gains taxes (i.e. less than 15 percent). In fact, since he wasn’t being paid income but presumably was liquidating his stake in Bain Capital, in the perspective of the IRS, he wasn’t earning any income — just selling assets (Bain management company back to his other partners).
http://talkingpointsmemo.com/archives/2012/08/missing_the_key_issue.php?ref=fpblg
The key part of the above being: Romney structured things so that he was just selling/liquidating Bain assets back to his other partners, not claiming income. Therefore, it’s totally conceivable that he paid no taxes for ten years.
No - it’s not. Even under the scenario secribed above (which is completely, 100% speculative) Mitt Romney still would have paid taxes on any other income streams he had, as well as on the liquidation of any assets. The man lived for ten years, during which time he ate meals, bought houses, bought cars, bought clothes, etc. etc. etc.
Mind you that during the last 10 years investments in Bain Capital investment partnerships (which Mr. Romney still maintains as a passive investor) were generally appreciating handsomely in most years. It is in theory possible that he paid no taxes for a year or two around about 2008-2009 because losses in those investments would have negated his tax liability. But for a ten year period the only way he would have completely avoided paying taxes is if his investment portsolio generated substantial losses every single year. And the historical record demonstrates that that is nearly impossible.
So, why has Mitt Romney consistently over the course of his political career refused to be transparent about his tax returns?
The other alleged income streams (also speculative, btw) are likely chicken feed in comparison to his Bain investments. I don’t care if he paid four or five figure taxes, the claim of no taxes would then be mostly true.
He had plenty of assets to live on without having to create a taxable event that results in a net capital gain.
If he just let non-IRA Bain assets appreciate during the ten years except during 2008-09, without getting dividends, then he would’ve gone without paying taxes.
I don’t find this terribly plausible. Let’s start with the fact that your second and third lines basically contradict each other. How do you plan to live off of your assets without creating a taxable event? Is it your assumption that Mitt had all of that money hanging around in cash? Did he have that many assets he could sell at a loss? I don’t think that’s very likely.
The other problem is that, even if you are correct, that’s not so much a tax avoidance scheme as it is a tax deferral scheme. All of those non-IRA assets would be sold at some point and he’d pay taxes on them then. That could lead to Reid being technically correct, but color me not very interested if the answer is that Mitt paid no taxes because he had no income. Not treating unrealized gains as income isn’t some sort of weird loophole. It’s a basic assumption for how our tax system works.
If it’s unfair to ask Romney to release his tax returns, then wild speculation about the contents of those returns is also unfair. Otherwise, it’s all fair game.
J. Michael, if Romney’s effective tax rate over 10 years was 1%, then yeah, I suppose Reid is “wrong.” Maybe even “lying.” If so, nobody will care. And I don’t think Reid is accusing Romney of not paying sales taxes, but I’d love to see Reince Preibus raise that point in Romney’s defense.
I don’t see Reid as a gambler. Think about what he’s done here, in your narrative. He’s told an obvious, provable lie in such a way that it can be effortlessly exposed by a mortal political enemy. I doubt it.
Right - and another point that has to be made as clearly as possible - Mitt Romney has been refusing to show his taxes for pretty much his whole political career. He’s had ample opportunity to learn just how this plays out in the media and on the campaign trail. So, why do we think he does it, folks?
And I have said before and will say again: stop the fucking hypocrisy about lying. We all do it, probably every day, for what we consider to be good causes.
If Mitt Romney wants to end this, he can produce his tax returns. Obama and Biden have put 12 years of taxes online for everyone to see. Put up or admit that Harry Reid was right, Mittens.
In 1974, running for the Senate from Nevada for the first time, Harry Reid accused his opponent of financial impropriety, including the accusation that he had not paid taxes for several years.
His opponent released his financial records, demonstrating that Mr. Reid was lying.
So no, Harry Reid’s statements on this matter are not especially credible.
Excellent, so clearly Romney should release his tax returns and demonstrate Reid/Reid’s source is lying.
Got a link?
It is not only plausible but very likely that in discussions with a potential investor a Bain partner, Romney or other, would have discussed tax treatment. The investor would want to know as a matter of course - as a factor influencing the investment decision. If these deals were structured so as to avoid taxes, or reduce them to minimal levels, Bain would certainly explain that to the investor. In the process, it’s certainly plausible that, when it was Romney making the pitch, he said something about his taxes. It’s conceivable that a statement like, “I haven’t paid any taxes on my profits here for ten years,” got transmuted, in the normal “telephone” fashion, into Reid’s statement. If that happened then I don’t think Reid’s statement is fatuous at all.
By the way, what’s this business about Bain partners being screwed out of a lot of money? I missed that.
1) Mitt Romney hasn’t been involved in running Bain Capital or making any investment decisions therein for years. Why on Earth would he have had reason to be touting the benefits of investments in the firm’s partnerships to new investors in the last couple of years (i.e. the only time in which he could have possibly told someone that he “hadn’t paid taxes in 10 years” if Mr. Reid’s statement is to be believed).
2) The vast majority of money invested in Bain Capital funds is from institutional investors - pension funds, charitable endowments, etc. An emphasis on reducing tax liability in making investment decisions would have been completely illogical, and the providers of most of the capital invested in the partnerships have zero tax liability and any such strategy could have only been achieved on the margins by sacrificing total pre-tax returns, something that the vast majority of investors would have found sub-optimal.
3) It is highly unlikely that anyone from Bain Capital would have been dispensing tax advice to potential investors. One incurs legal liability in advising another person on tax strategies, and thus it would be highly risky for anyone at the firm to be courting potential investors by making statements about the likely tax liability of the transactions, especially if they had no in-depth knowledge of said individual’s financial situation.
4) The vast majority of Bain Capital’s private equity investments have been very vanilla. They buy a company at a certain price (often but not always publicly disclosed) and sell the company a few years later for a higher price (often but not always publicly disclosed). It is possible that via quirks in the tax law that Bain Capital occasionally can make a successful investment that generates no capital gains tax liability for the investors in the partnership, but more or less impossible that this was done so frequently as to completely wipe out the tax liability of an entire successful investment partnership which over its life would have invested in a large number of companies.
5) And of course, even if we overlook every one of these realities, and overlook the fact that Harry Reid made a completely unsupported charge that his 1974 Nevada Senate opponent had paid no taxes for several years (a lie, BTW), then we’re left with the question of why a wealthy individual, who had recently been courted as an investor into Bain Capital by a guy who hadn’t worked there in more or less a decade (and who was apparently close enough to Mitt Romney that the latter, who was running for political office, would feel comfortable disclosing embarrassing details about his personal finances to the individual), would call up Harry Reid and spill the beans on an apparently too-good-to-be-true investment strategy. Oops - I meant multiple wealthy individuals, because after Reid was challenged on his accusation a couple days after making his original statement, he indicated that he had heard this from multiple people.
Harry Reid is lying.
You haven’t actually shown that Harry Reid is lying. You’ve demonstrated a willingness to whitewash Bain’s despicable predatory activities and ignore Mittens’ career of falsehood, financial charlatanry and consistent refusal to show his tax returns when running for office. Mazeltov, comrade!
sd…
Sounds like you believe your own flubdub. That Romney is a totally upstanding man who worships earnestly and honestly at the temple of Mammon.
And that he works hard to create jobs for wee people…
Why I bet you suspect he has callouses on his hands.
So then…
What’s your fine-haired capitalist hiding?
Why doesn’t he release his taxes?
Got some flubdub for that?
PS….
I know you American capitalists are always trying to save time, money, capital…
To maximize the profits to the thousandths place…
That’s your religion.
And it don’t matter how many lives you sacrifice for that good of that god…
So here is the definition to save you some electrons:
flubdub- pretentious nonsense
sd,
1. A reasonable question.
2. Irrelevant even if true. Just because most or many of the investors were non-profits - how do you know this, by the way? - does not mean there were not also private investors who were very interested in the tax consequences.
3. Wrong, I think. Discussing tax benefits is not “dispensing tax advice,” or no real estate agent could ever safely mention to potential buyers that mortgage interest generates large tax deductions.
4. Plain vanilla underlying real (in the economic sense) investments can easily have highly complex financial superstructures, including offshore ownership and the like. You can buy and sell companies lots of ways, and through a wide variety of entities. Note too that this does not necessarily involve reducing pre-tax returns, as you suggest in point 2.
5. Harry Reid told a lie in 1974, so nothing he says can be trusted? Then how do you manage to believe a single word that comes out of any Republican’s mouth, especially Romney’s? If we go strictly by the historical record then Romney’s statement that he has paid taxes is vastly more suspect than anything Reid has said. The record also suggests that Romney was far from being above hiding a Swiss bank account, misstating the value of assets on gift tax returns and IRA reports, or almost any other piece of tax-related chicanery.
You assert quite confidently that Reid is lying the trouble is that, as has been endlessly noted, even by you in the 1974 case, Romney has an easy way to show that by releasing his returns. Though not as effective as releasing the returns, he might even ask PriceWaterhouse - his accountant - to issue a statement on the. He hasn’t done so.
Are you as confident that Romney is hiding some extremely serious problem with his taxes? And which do you consider worse - running an easily exposed bluff as Reid may be doing - or saving millions by engaging in tax shenanigans, possibly criminal or borderline so, but in any case bad enough that you are absolutely unwilling to have them exposed?
You’re deeply shocked and offended by Reid. Yet my guess is that despite the overwhelming evidence that, even if Reid made his story up out of whole cloth, Romney is a bigger liar by orders of magnitude, you’re going to vote for Mitt.
“2. Irrelevant even if true. Just because most or many of the investors were non-profits – how do you know this, by the way? – does not mean there were not also private investors who were very interested in the tax consequences.”
Nope. First, I know this because unlike 99.9% of the commentors on this and related discussions I know how the private equity industry works and have done business with multiple private equity firms, including but not limited to Bain Capital. Private Equity has long been a preferred investment vehicle of institutional investors (who put hundreds of billions of dollars of capital to work every single year) because they have very long time horizons (and thus can tolerate having their capital tied up in the kinds of long-term investments that privater equity funds make) and because private equity provides valuable asset class diversification for such investors.
Further, a fund (like Bain Capital) that gets the vast majority of its invested capital from institutional investors would be foolish in extremis to chase to tax-advantaged investments given that they have limited capital to invest and that a deal screening criteria oriented around tax advantages will by definition under-weight criteria related to the inherent economic attractiveness of the assets purchased.
“5. Harry Reid told a lie in 1974, so nothing he says can be trusted?”
No, Harry Reid told the exact same (specific) lie in 1974 without any evidence and thus when he makes a highly (indeed more or less completely) improbably statement now of the exact same type it is reasonable to doubt his credibility. He’s been to this well before.
“If we go strictly by the historical record then Romney’s statement that he has paid taxes is vastly more suspect than anything Reid has said.”
No it’s not. You clearly have no direct experience with private equity partnerships now of the tax treatment thereof. You’re just making stuff up now.
“You assert quite confidently that Reid is lying the trouble is that, as has been endlessly noted, even by you in the 1974 case, Romney has an easy way to show that by releasing his returns. Though not as effective as releasing the returns, he might even ask PriceWaterhouse – his accountant – to issue a statement on the. He hasn’t done so.”
The reason that smears like this are so destructive of rational political discourse is that one can make similar statements about just about any private domain of life and then assert that ‘of course’ this controversy could all go away if the subject released otherwise private information. There is a noxious story floating around the conservative blogosphere right now (in response to this controversey) that Barack Obama has been unwilling to release his academic transcripts because he enrolled in Columbia University as an foreign exchange student (presumably to get an admissions edge when he transferred from Occidental College where his grades may not have been stellar). It’s more or less equally credible with the Reid allegation - which is to say “no credible at all.” But of course Brack Obama could easily dispell this whole kerfuffle by… You get the picture.
“And which do you consider worse – running an easily exposed bluff as Reid may be doing – or saving millions by engaging in tax shenanigans, possibly criminal or borderline so, but in any case bad enough that you are absolutely unwilling to have them exposed?”
I consider breaking the tax law worse than lying. But there is zero - zero - evidence that Mitt Romney has done that. I consider lying to be worse than taking advantage of legal tax regulations to lower one’s tax bill - something which everyone who claims a mortgage interest deduction or a charitable giving exemption does every year. Hope that was helpful.
“You’re deeply shocked and offended by Reid. Yet my guess is that despite the overwhelming evidence that, even if Reid made his story up out of whole cloth, Romney is a bigger liar by orders of magnitude, you’re going to vote for Mitt.”
Why in the world is my intended vote choice of issue. Either this community is, um, “Reality Based,” in which case it should probably be against bald faced lies. or it is not. Mitt Romney isn’t running against Harry Reid in any event. But Harry reid is still a liar.
“Why in the world is my intended vote choice of issue.”
Look up the word “bias” sometime. You might find it instructive.
sd,
So we are supposed tO believe you because you claim to have the exact sort of insider knowledge you also claim Harry Reid cannot have? A US Senator is one of the 500 most powerful and politically-connected people on the planet - far more connected than Random Equity Dude. Why can’t Reid have the inside info, exactly?
Cranky
Cranky,
I’m not claiming to have insider knowledge - I’m claiming to have specialized knowledge. Understanding of how a relatively obscure corner of the economy works isn’t a matter of access to secret or privledged information (like another man’s tax returns), it’s a matter of access to public but generally not well known information. If Harry Reid, as one of the “500 most powerful and politically connected people on the planet” has access to Mitt Romney’s confidential tax returns then he is in all likelihood a felon as access to individual tax return data is forbidden to people who do not have to deal with such information in their day to day work. Note that I’m not claiming that Harry Reid is a felon. I’m claiming, as anyone without a 50 pound ax to grind a modicum of knowledge about how these things work would, that Harry Reid is lying.
If a Republican Senator said “Barack Obama is unwilling to release his medical records because (as I have been told by someone on his inner circle) he has liver damage from prolonged marijuana abuse,” and a doctor chimed in to say “that’s impossible - marijuana use doesn’t cause liver damage,” then you wouldn’t say that it was a dispute between two people who claim to have “insider knowledge,” you would rightly say that it was a dispute between someone making a remarkably outlandish claim that flies in the face of everything human beings understand about the world and someone who knows what the Hell they are talking about.
And Harry Reid is lying.
sd,
Are you seriously claiming that these firms don’t try to structure investments to minimize taxes? Really? What are all those Cayman Island and other offshore accounts all about?
No. I’m not making stuff up. My statement has nothing to do with private equity. It has to do with Romney’s history of complete disregard for the truth. Some of what he says might be true, but only by accident. Mostly, he’s happy to lie if it suits him. This is a long-standing pattern of behavior.
No doubt. But here the private information being requested is information that Presidenetial candidates have routinely released for many years, and that Romney himself was willing to reveal to McCain when he wanted to be nominated for VP. Not quite what you’re talking about.
Is there zero evidence that Romney is willing to break tax laws? Look up his involvement in Marriott. And how did his IRA get to be worth $100 million or so? And what odds would you give that he paid proper gift taxes on his transfers to his children? And is Rafalca really a business loss, and not a hobby deduction?
No, we don’t have documentary evidence about Romney’s tax compliance. But the suspicions are hardly baseless, as they are in the transcript issue you describe.
sd,
One more point.
You ask why it matters how you’re planning to vote.
Here’s one answer. The Romney campaign has so far told blatant lies about Obama’s welfare plans, and about the Ohio voting lawsuit. It has produced a laughably dishonest “tax plan,” which, if you are as financially knowledgeable as you seem to be, you must know is an utter fraud aimed simply at reducing taxes on the Romney class. I’m sure others can supply further examples. Yet your outrage over dishonesty is directed at Harry Reid who, as you point out, is not even a candidate.
So maybe you could start riding a slightly lower horse.
Which story is known to be bullshit by most people who know much about Occidental. They’ve had a special relationship with Columbia University for a very long time. It’s common for Occidental students to spend a semester or a year at Columbia. Some of those end up transferring, and they get special treatment.
Just to be annoying — because it’s hot out — how can anyone be sure that Reid is lying, and also be sure that Romney’s not a tax evader? There simply isn’t enough evidence to be sure about anything. I can think of lots of ways both Reid and Romney could turn out to be correct — well, partly that’s because I’m not a tax expert, and, no, I don’t feel at all bad about that.
But again, asking these questions about Romney’s taxes is *entirely* fair. And I would hope that even Republican voters would want to know the deal. After all, they are used to being sh*t on by rich people, and in fact seem to like it, I doubt anything Romney’s sitting on will even faze them. Honestly if he’d just come out with whatever it is last year, no one on the right would even care by now. Though, the indies might. Which I gather is the whole problem.
Actually, Bernard, you’re both right. Private equity has a lot of institutional money that does not want to, say, plunge all their funds into tax-advantaged but low return muni bond and structured leasing deals, and the P/E firms are incorporated in the Caymans for tax reasons: it lets their institutional investors enjoy the higher returns of P/E funds without triggering the Unrelated Business Income Tax, described here: http://www.irs.gov/charities/article/0,,id=96106,00.html
This is not exactly nefarious tax-dodging; the UBIT rules exist for a reason, but the desire to get higher returns (i.e. more funding for your charity work or pensioners) does not violate the spirit of those rules, which were intended to keep people from dodging taxes by turning their business into a “nonprofit”, even if it might violate the letter.
If you don’t believe me and SD, turn your attention to liberal journalists at places like The Atlantic and Salon, who have called tax lawyers and estate planners and all gotten the same answer: the fantasy super-secret Bain investment vehicle which allows you to realize buckets of cash while paying a 0% tax rate, so prevalent in the storytelling in this thread, does not exist. Bain isn’t selling it (they’re not a tax structuring firm, they’re a vanilla LBO-with-a-bit-of-VC firm whose secret sauce is supposed to be “Bain people are really smart”). No one is selling it. Except for muni bonds (which are really just diverting federal tax dollars to municipalities at a slight discount), there are no investment vehicles which allow you to pay a 0% tax rate while simultaneously spending the cash. Moving your money offshore does not reduce your tax liability to zero, unless you commit criminal tax fraud, which most of the experts seem to think is vanishingly unlikely-the risks are too great, and he doesn’t need the money. But anyway, that wouldn’t lower his effective tax rate, because it wouldn’t show up on his return in the first place. If the IRS knows about it, they make you pay taxes on it, wherever it is.
Unless he committed criminal fraud, if Mitt wanted to spend money, he paid taxes on it. This is not the sort of thing that you can reason your way to from first principles, like Aristotle, or from one dimly remembered David Cay Johnston article; there are actual facts about the tax code. A perfectly reasonable intuition that rich people pay too little tax seems to be driving an awful lot of people to the ludicrous belief that rich people can, merely by being rich enough to invest with Bain, pay no tax at all. If that were possible, how could we be collecting so much tax revenue from the top 1%? You may think it’s too little, but if rich people could pay someone to make their tax liability go away, the share of taxes paid by the top 1% should be 0%, not double digits. It’s not that only the moral, progressive ones are paying taxes: even avid Democrats like Bill Gates and Warren Buffett structure like hell to keep as much of it as possible out of Uncle Sam’s hands. And yet, they pay millions and millions of dollars in taxes every year, because they don’t have any choice.
The Reality-Based often have trouble dealing with situations like this, which is why the Reality-Based are so frequently baffled and buffaloed by the opposition.
How much did Romney pay in taxes? You might as well ask much WMD did Saddam have. The answers to these questions won’t be determined by your puny “facts.”
Harry Reid doesn’t care if he is proven a liar. Will he hang his head in shame? Will he fall on his sward? Will he resign his senate seat. Will anyone remember this crap after november? The answer is an unqualified NO!
Harry Reid is, God love him, playing hardball. He is making all interested parties ask the question that is important: Who the hell is this Romney guy and what is it he is hiding and why? If it takes a stretch of the truth, a tale told out of school, a half truth or a bald faced lie to get us all on track to save the republic from this slippery financial hack then praise be.
Jimmy C at the top of this page nailed it. Why is it only liberals worry about playing lilly white fair? The GOP has been stealing the silverware for decades while we worry about using the propper fork.
Jeez, am I the only person in this room old enough to remember Nelson Rockefeller being designated as Gerald Ford’s new Vice President in 1974? He had not paid any federal income taxes for at least one year (IIRC) prior to 1974.
And this was the 1970s, when we still had a relatively progressive tax code. The tax code has only gotten more favorable to plutocrats since then.
I totally believe that motivated tax lawyers and accountants could find enough tax havens and write-offs so that Romney paid NO federal income taxes for at least ten years.
What I don’t understand is why that’s so hard to credit.
People won’t believe what they don’t want to believe. Just look at sd’s performance upthread.
I’m citing facts and logical arguments based on direct knowledge of the private equity industry and the relevant tax law. The people arguing against me saying things like “I totally believe that motivated tax lawyers and accountants could find enough tax havens and write-offs so that Romney paid NO federal income taxes for at least ten years.”
But yes - you’re correct that people won’t believe what they don;t want to believe.
“…direct knowledge of the private equity industry and the relevant tax law”
Prove it, sd. Why should I take the word of a Romney supporter for anything? Your candidate has lied consistently and shamelessly throughout his political career - why would I assume that you are doing anything different? You haven’t given us a single reason to believe that you know what is actually in Romney’s tax returns, as opposed to your own suppositions.
So, supposing it turns out you’re right. Romney coughs up all his returns, and somehow although it’s all technically legal, he has paid little or no taxes.
Would I feel bad then about this debate, or about “making” him cough them up? Not at all. There’s a higher standard when you run for President. Being super rich and paying no taxes *is* ethically problematic. Very much so. And voters deserve that information.
sd has claimed that Reid lied about an opponents tax returns in 1974, but sd has failed to provide any proof.
I found this, which doesn’t support sd’s claims:
“A political showman, Reid held a news conference in October 1974 to distribute “a thick packet” of financial statements and tax returns for himself and his three brothers, the newspapers reported at the time. And Reid challenged Laxalt to do the same - release financial information about himself and his siblings.
“Any man or woman who will not be completely candid about his or her finances does not deserve to be in public office,” Reid said, according to an Associated Press report out of Reno.
Reid said there were years Laxalt had paid no income taxes and people should know why. In response, Laxalt said heavy investments in the Ormsby House exempted him from tax liability in 1972 and 1973.”
http://www.lvrj.com/news/reid-has-history-of-making-dubious-charges-165105076.html
Hopefully we can back to the subject of Romney, and hopefully commenters can stick to factual allegations.
Nice work - thanks for digging that up.
Just to save sd the trouble, I’ll say that Reid admits in a work quoted in the linked piece that he had made charges that turned out not to be true.
But what the piece doesn’t do is support the idea that it’s wrong to ask tax questions of a candidate. In other words, making the charge is entirely fair. When you run for office, your finances become relevant. This whole thing is another proof that the MSM’s not really that liberal. This is an easy question.
sd has claimed that Reid lied about an opponents tax returns in 1974, but sd has failed to provide any proof
Yeah thanks.
But I guess I’m more American-world-weary than you folks.
I just assumed it was a right-wing talking canard from the moment sd posted it.
And so I immediately filed this thought away: sd believes and passes on what he reads on right-wing blogs.
Along these line, one of the things that is so wonderful about this tax dust-up, you get the full panoply of right-wing tactics.
Beyond just making things up…
For example: Romney demanding for Reid to release the name of his source(!).
How rich is that? That’s as pure a display of basic Karl Rove strategy as you are going to find.
Although…
I don’t think the honey badger is going to let the Rove-weasel win this fight.
After all, this is just too brilliant:
“Any man or woman who will not be completely candid about his or her finances does not deserve to be in public office,†Reid said, according to an Associated Press report out of Reno.
And the more time the public spends listening to arguments about whether Romney is a serial liar and a tax-cheat, the better for Obama, who is just floating calmly above the honey badger’s de-testiculation of the Felonious One and enjoying the roaring and raging emanating from the cloud of dust.
So, now that I know what a honey badger reference means, and not that this is in any way your fault, but I think maybe that imagery is a little too violent?
Of course, I’ve been swearing a blue streak myself today, so I should really stop.
I think it’s worth distinguishing between comic images of violence and actual threats or calls for violence, NCG. Anyway, honey badger don’t care what you and I might think. He’s latched on and Mitt Romney’s teabagging days are so over.
De-testiculation of Mitt Romney?
Now, now. Let’s not assume facts not in evidence.
Just a thought, and yeah, maybe I’m going out on a limb here, but why don’t the self proclaimed fact checkers, political insiders, hangers-on, etc., who are in many/most cases affiliated with newspapers, magazines, journals, i.e., in some measure they ARE journalists, go out and, oh, I don’t know, practice some journalism? Harry Reid said a source from Bain told him Mitt’s little (income) tax secret. Well, it might actually take a bit of work, with perhaps a few doors slammed into their faces, a bit of ego bruising, but I doubt it’s impossible to determine if Reid has any relationship, be it personal or business, with Bain insiders. After making this determination (which could be reported), you then try to get these people on the record. If they won’t speak on the record, that can be reported, or perhaps these august fact-checker journalists could offer them anonymity as off the record sources.
If I recall, a CNN reporter DID suggest Reid was credible, but I didn’t follow up…but, then again, I’m not a journalist.
One thing that I’ve seen over my lifetime (I’m 47) that’s troubling is that the already rather cozy relationship between journalists and the people they’re covering has really gotten into dangerous territory. Maybe I’m naive, but it really struck me when Tim Russert said in the Scooter Libby trial that he assumed conversations with politician were off the record, because at one time in the not so distant past I’m pretty sure the rule of thumb was the opposite.
According to the Rachel Maddow show of a couple of days ago, Romney blatantly and repeatedly lied about his tax returns when he was running for Massachusetts governor. He had refused to release the returns, but asserted repeatedly over a period of months that he had filed as a Massachusetts resident. Eventually this went to court, because his opponents were trying to prove that he was ineligible to run for Massachusetts governor as a non-resident. And the truth came out- he was lying. He lied about his tax returns.
http://video.msnbc.msn.com/the-rachel-maddow-show/48497159#48497159 (the relevant section starts at about 11:30)
So why would I believe him this time, when he lied last time?
Because Megan McArdle is a Very Serious Person, even though she knows nothing about economics or business?
I think Romney should be proud - think of all the jobs those uncollected tax dollars created.