Since I’ve been pretty censorious about people throwing around unsubstantiated charges, I need to walk back my charge that Harry Reid was “lying” about his supposed conversation with someone who allegedly knows that Mitt Romney didn’t pay any taxes for 1o years. Politico reports, based on comments by unnamed Reid staffers, that Reid actually believes what he’s saying. And it’s possibly that my original post unduly discounted the possibility that, within the rather narrow world of the Mormon financial elite, Reid and Romney might actually share an extremely close associate. I still regard it as grossly improbable that Romney actually paid zero federal income tax for 10 years, but it’s not impossible that Reid was actually told that, or something very like it, by a credible source.
I agree with all the commenters here that Romney and his cronies have utterly forfeited any standing to object to being lied about. And it seems indisputable that Reid’s tactic will be a net political winner from Obama’s perspective. That still leaves me on the Kevin Drum/Jon Stewart  side of the ethical question.
Footnote How stupid do the Republicans have to be to keep on making a fuss about this? Â I’ve said it before, but it’s still true: any sentence containing the phrase “Mitt Romney’s taxes” is good for Obama. Â Yes, what Reid did was unfair, but if those guys had any sense they’d just suck it up and go back to telling their own lies, such as the lie that Obama is trying to interfere with military voting when in fact he’s trying to make it easier for everyone to vote.
i applaud this post and thank you for reality-checking your earlier sweeping assertion. i can much more easily accept your position here about probabilities than the original categorical one.
I don’t think there was anything unfair about Reid’s statement. If he is wrong, it’s easy enough for Romney to refute it, by doing what virtually every Presidential candidate in living memory has done and what almost everyone (including Republicans) believes he should do, which is release his tax returns.
Clearly, Reid is trying to goad him into releasing his tax returns, and it’s also pretty clear that there is something about those returns that makes Romney not want to disclose them. I, for one, am offended that Romney was willing to turn over his returns to the McCain campaign in 2008 but isn’t willing to turn them over to the American people he is asking to vote for him in 2012.
I, for one, am offended that Romney was willing to turn over his returns to the McCain campaign in 2008 but isn’t willing to turn them over to the American people he is asking to vote for him in 2012.
That really is the proper pose to strike. Under the logic of fairness, equality, and precedence everyone has a right to be offended.
This is not Romney’s planet and we are not living on it.
My understanding of Mormonism is that you become a god and rule planets after you die on earth.
I realize that absolute capitalism corrupts absolutely…
And that Romney has gleefully condemned many citizens to joblessness by his ruthless pursuit of profits for the few…
And that’s all that’s “good” in the America of neoliberals, conservatives, and tea party ding-a-lings…
So much so that Romney’s absolute corporate corruption is a apparently an electoral asset…
Still I think, Romney is getting the gold cart ahead of Ralafca here…
This isn’t his planet…
And we are not his servants…
Yet.
Until then: Show us your taxes asshole.
http://exmormon.org/d6/drupal/Mormons-get-their-own-worlds
No reason to bring their theology into it. I object to the Mormon Church’s habit of meddling in politics, and I don’t like what I’ve heard about the role of women in Mormon theology and in a Mormon society but - though I find them far from believable - I have no reason to insult their ideas about the afterlife.
I regard Mormon theology as relevant, albeit in a different context.
Think back to the apoplexy displayed by some when excerpts of the Rev. Jeremiah Wright’s sermons were disseminated online during 2008. Remember the squawking about then-Senator Obama having associated with a church led by a racist pastor?
Well, Mitt Romney was reared in an overtly racist church-one that excluded blacks from its priesthood until 1978-a few years after the IRS started questioning the tax exempt status of some religious organizations which discriminated based on race. During his adulthood, he elected to remain affiliated with that church.
Did Mitt Romney ever express even a scintilla of disagreement with his church’s doctrine regarding racial inequality?
Warren Terra…
You are over protective of sacred cows. You assume that the merely writing about what they believe is to insult that belief.
All I did was connect the popular phrasing: “Blankety-blank thinks it is his/her world and we are just living in it” with the Mormon view of the afterlife.
A rather clever juxtaposition. Did I impugn the implications of that belief in any way up above? No.
On on the other hand:
Do I think religions that promise its adherents the power of gods and their own planets in the afterlife a particularly immoral sell?
They are no more immoral than those religions that bully people into purchasing by threatening their customer base with eternal damnation…
What I did insult up above was the religion of absolute capitalism: the ruthless business model Romney invented in the 90s to squeeze every dollar out of every non-shareholder pocket and into every shareholder pocket no matter the cost to other human beings. I realize that is American capitalism as practices today. I find it, and it is practitioners, particularly odious and immoral.
@John
Sorry, that ship has sailed a long time ago. Of all the things to get offended at Romney and his church, racism is far less an issue now. LDS has repudiated its former position-we can argue to the end of day whether that decision was moral or pragmatic, but the point is that it did repudiate the position when Mittens was barely out of college. So, no, institutional racism is not the issue to attack Romney on. But there are so many, including the church position on women-and one that Romney so obviously endorses (just check his record with women subordinates-if Kerry Healy even counts as one). And Mittens loves to take credit for the work of others (Olympics) and always-always-tries to blame others for his own failings. Of all the things to complain about, you found one that I don’t support. Furthermore, one does not leave the church because of the church’s immediate moral failings-just ask the modern Catholics. The position is always that it’s the people who failed, not the church. Of course, just try to convince an average teabagger of this point in reference to Jeremiah Wright…
I suspect that Reid’s statement, which, in summary fashion, is: “Someone credible told me that Romney paid no taxes” is true. However, that does not necessarily mean that Romney, in fact, paid no taxes. I can imagine the possibility that for one or even two years, he zeroed out on federal taxes, although I think it unlikely. However, no taxes for some extended period? Nah.
That said, all Romney has to do is disclose his tax returns (both income and his gift tax returns) to disprove the unnamed source.
To extend the logic fully here, Reid said “someone credible told me that Romney paid no taxes.” This is likely to be the truth: someone told him X. How credible that person is remains the question. The “someone credible” could well be lying.
But when the Republicans accuse Reid of lying, what they mean is that Reid should is too gullible by trusting a credible source without first seeing the proof. By calling him a liar, Republicans are most likely lying themselves.
‘The “someone credible†could well be lying.’
Or simply mistaken.
What I think is credible is that 1. Bain structured itself so investments in it paid no taxes for very long periods (deferred capital gains); and 2. a Bain investor would know this, and possibly know something about Romney’s investment in Bain.
The above isn’t enough to prove that Romney paid no tax at all for long periods, but if correct would likely mean he paid zero taxes on his main financial activity and is pretty close to the truth. It could also mean that Romney is highly misleading but technically accurate in denying the statement and claiming he paid taxes every year.
“It could also mean that Romney is highly misleading but technically accurate in denying the statement and claiming he paid taxes every year.”
That was certainly my interpretation. I’ve corresponded with Drum and pointed out that Romney’s response was not to Reid’s accusation. Romney said that he paid all his taxes and that he paid all of them, then followed up with “Harry is wrong.” This does not address the issue of being obligated to pay some taxes every year. Furthermore, there is the question of perfectly legally earning millions of dollars and paying nominal taxes (four-five figures). This would technically make Reid wrong, but almost every sane voter would side with Reid if this were revealed. There is every reason to believe that this is exactly why Romney is not releasing his taxes. What if it turned out that the way Bain securities were structured, half of all investment returns were paid as dividends through the IRA? That would certainly explain why Mitt’s IRA is about $100 million, which is almost half his worth. This is certainly something that would show up on the tax returns as well-and it would also mean that Mitt never paid income tax on these. So here’s another trick-what if Reid is playing the same game? We already know that most of Romney’s “income” was taxed at lower investment rates. Did Reid say “tax” or “income tax”? In fact, even if he said “tax”, it is possible that his source correctly said that Mitt paid no income tax for 10 years because all his gains were deemed to be through investment, not salary. And Reid misinterpreted this as “taxes”. Here’s the kicker: which 10 years are we talking about? Mitt earned a salary with the Salt Lake Olympic Committee, so he had to pay taxes on that. But he declined the gubernatorial salary. So he had no income from 2002-2006. Even if Reid’s claim is about pre-1999 taxes, it is certainly true that Mitt would have had no “income” in 2002-2006, which certainly would have fallen into the list of years whose tax returns people want to see.
But let me suggest one other thing. Why all this moralizing and navel gazing about Reid’s un-Kosher behavior? If this were a Republican doing this, not one news publication would have said anything (of course, this also would have meant that it was a Democrat who was hiding his taxes, but that’s another matter). The point is, why should we allow Republicans to get away with far worse things, then take the holier-than-thou attitude that, in the end, fails to win any fans? Why not match even a modicum of their smears and dirty tricks with a few of our own, if for no other reason, to let them know that they can’t get away with this? Face it-Romney lies nearly every time he opens his mouth. His surrogates make shit up on a daily basis and the media fails to call them on it; and when they do, they also drag out what they believe is the Democrat half-truths, which, on a closer inspection, turns out to be complete fiction. Why not match them at least on one issue? If we allow for this possibility, Harry Reid hit a home run. Romney is boxed in. They can call Reid a liar and keep complaining about fairness, but they can’t undo it without releasing the tax returns. And they can’t release the tax returns now because all the previous posturing would make Romney look weak if he did. No matter which way he turns, it’s a win-win for Reid and a loss for Romney-at least, until he changes the narrative by picking the VP and he does not want to do that too early, as any vetting before the convention is likely to reveal a lot of dirt. And it also eliminates a number of VP contenders if they have their own problems with tax returns.
What Reid did may look ethically questionable, but, given the contemporary campaign strategies, it was a perfect move. I applaud him.
Very well put. I think the ethical considerations of studiously precise populations such as honest academia overlap only slight;y with the necessary force of politics, as practices on an increasingly impre4ssionable population. It’s been said elsewhere, but for better or worse Americans ultimately, electorally respect force. Said force can be considered, fundamentally ethical, grounded in best practices, intelligent, and generously applied for the benefit of most or all; or it can be the pre-adolescent, emotionally and socially retarded, nihilistically destructive and vicious narcissism of modern conservatism – your choice. What strikes me about Reid’s sudden acquisition of brass balls is the timing – if “no unnecessary risks†Reid has decided it’s safe to depenistrate the dragon, says to me the dragon is tired. Very, very tired. Which brings me back to my original point – this is war, modern civil war by other means. There is only one end to this – merciless destruction. Those who can, must. Those who can’t: please be quiet, get some popcorn, and enjoy the show.
It’s quite likely that Mitt Romney did not pay income taxes (at either the personal or corporate rate) for his work at Bain as a consultant because Bain’s investment vehicles were headquartered in tax shelters (avoiding the corporate tax) and income was realized as carried interest (avoiding the personal income tax). Investors in Bain funds, such as those who Reid might know, should have been aware of how fund managers, consultants, etc were being compensated — they had more access to this information than journalists who are looking into it today. Mitt earned most of his income in this capacity; it’s pretty reasonable that a 90s/2000s-era Bain investor could credibly say that Mitt did not pay income taxes on what every reasonable person considers personal/corporate income.
Obviously, Mitt likely paid income tax on income he received for personal appearances, book deals and serving on corporate boards. I still think it would be fair to say, as a Bain investor, that Romney “paid no income tax” for a decade if Romney structured his compensation at Bain (his primary source of income) to avoid paying income tax. Imagine the limiting case in which Romney makes tens of millions at Bain and only pays investment-tax rates, thus paying no income tax. He then puts in 1 hour a week delivering pizza and pays a token amount of payroll and income taxes. Would it be fair to say that he pays no income tax?
I’m not in any way a tax expert, but I think the distinction you’re drawing is wrong: you’re arbitrarily deciding that “earned income” is subject to something you’re calling a “personal income tax”, from which you’re excluding unearned income (capital gains). It’s a scandal that fund managers get away with using the “carried interest” rule to claim that earned income is in fact capital gains, and it’s ridiculous that we privilege capital gains income the way we do. But the (low) tax paid on capital gains income is still income tax.
Conservatives routinely say (1) that 50% of people pay no Federal income tax even though most pay payroll taxes and (2) capital gains are already taxed as income at the corporate level and investment taxes are a double tax. If someone were to figure out a loophole to pay their income tax at sales- or property-tax rates it would be similarly fair to say they paid no income tax.
I like the fact that you tied this to “income tax”. Romney has had no “earned income”, so he pays no “income tax”. He has “investment income” so he pays a different category of tax. But the income tax meme hangs him by his own petard even if he does pay all the taxes that he owes (which, I am sure, he does).
Zach,
Are you saying that taxes on capital gains, whether “carried interest” or other, don’t count as “income tax?” That’s not right.
OTOH, maybe all these things are headquartered in the Caymans or somewhere and the money stays there. But then how does he get it? Suppose I have untaxed profits in some tax haven and want to spend some of it in the US. If I just transfer the money to whoever I’m buying a house or something from, does it get taxed? I don’t know.
One interestingthing on the 2010 return is that Romney’s forign taxes paid ballooned between 2005 and 2008 (look at pages 164-167 of his return) and then dropped sharply. What was that all about, I wonder?
If you have personal income in a tax haven, aren’t you still required to report it, and to pay taxes on it? I thought that even US corporations in theory had to pay tax on their income elsewhere, and that they evaded this by creating foreign subsidiaries to earn the income overseas and not repatriate the income to the US.
Correct. American citizens have to report their worldwide income.
For example, even though I’m living in the UK, I have to tell the IRS all my UK income. I don’t have to actually pay income tax on my UK income, because of the Foreign Earned Income Exclusion and the UK/US tax treaty preventing double taxation.
My understanding of the way the treaties preventing double taxation work is that (in most cases) the taxes paid on income where the money was earned, to the country where it was earned, is usually subject to treaties making those taxes deductible dollar-for-dollar from the taxes you’d otherwise owe Uncle Sam on that income. But it has never affected me personally, and I know nothing about the “Foreign Earned Income Exclusion”.
Yes. But AFAIK, there is no reporting requirement whereby the IRS is informed of your UK income. That might not matter with respect to the UK, but it could easily be useful if you lived in a lower-tax country.
Warren,
the Foreign Earned Income Exclusion wouldn’t apply to Mitt Romney, since it requires living abroad and is also capped at an income of some $95k. It mainly exists to make life easy for the IRS and expats when dealing with low- to mid-income individuals where the hassle of filing a complicated tax return (especially one that results in zero tax liability) is just not worth it. It also only applies to wages and self-employment income.
Tax treaties vary by country and are generally a pain in the neck to understand. The one time I had to resort to it (when we were moving to the UK and I hadn’t been in the UK long enough to claim the FEIE), I decided to pay a tax specialist with expertise in expat tax returns to sort it out for me. In general, though, it’s not just that those taxes are deductible (at least for countries that aren’t tax havens). This varies by tax type. For example, under the US/UK tax treaty, interest is generally taxed only in one country (with some exceptions). Dividends can be taxed in both countries, but there’s a limit on how much.
Obviously, the UK is not a tax haven, unlike (say) Monaco, which has tax treaties only with other tax havens (and an inverse tax treaty with France that allows France to tax French citizens living in Monaco).
Actually, byomtov, Congress does require just such compliance from banks who do business with the US: http://www.irs.gov/businesses/corporations/article/0,,id=236667,00.html
This has caused all sorts of unpleasantry with foreign banks, who have begun threatening to get rid of their US account holders.
And in practice, long before FTCA, the IRS was pretty friendly with regulators in other countries who made it fairly easy for them to track down foreign assets. And yes, if you suddenly transfer several hundred thousand dollars into the US from the Caymans, the IRS will note the transaction and quite probably call around to inquire whether you have paid tax on that money. They’re really quite sophisticated; for a while, they were using those zip code demographic programs that marketers use to detect people whose stated income was at wild mismatch with their address. As I recall, this resulted in a lot of audits of au pairs and housekeepers, but they probably caught some tax cheats, as well. In general, a pricey purchase or transfer that is wildly out of line with your declared income is quite likely to attract their attention. I mean, if you’re declaring $18K and you want to plunk down $75K in cash for a brand new triple-wide with all the bells and whistles, you’re probably safe. But if you’re declaring $300k and you suddenly own a $20 million home in the Hamptons, you can expect that the IRS will inquire.
Megan,
There’s some problem with your link.
Ack, sorry, can’t make it come through right. Google the Foreign Account Taxation Compliance Act if you’re interested. Essentially, any bank with American account holders has to report details of accounts to the IRS, or face a 30% withholding on assets held in America. Viewed abroad as a fairly douche move by the US, throwing its weight around with law-abiding institutions it doesn’t regulate. Unsurprisingly, congress didn’t care.
Well Megan, I did Google it.
The first thing I learned was that the act was signed by Obama in 2010. So all those reporting rules you’re going on about weren’t in effect during the years for which Romney has not released his returns.
The second thing I learned, from a NYT article linked to in a Wikipedia footnote was this
Not the clearest explanation, but the point is that there was a giant loophole there.
So maybe tax shelters didn’t quite disappear as completely as you claim, and maybe the reason for keeping money in the Caymans did have something to do with that. Or maybe it was the pre-2010 secrecy. You don’t really need a shelter if the IRS deosn’t know about your money, now do you? I’d be interested to know if you cabn supply a reason for keping all that money offshore that has has nothing to do with tax avoidance.
Here’sthe fixed link http://goo.gl/XdUJx
See above; Republicans don’t count payroll taxes as income tax even though they are very much income taxes since they’re flat taxes on wages (actually somewhat regressive since they’re capped). Taxes on capital gains are not income taxes; they’re taxes on appreciation of capital. You can make a better argument for taxes on dividends, obviously, but those are less taxes on income than payroll taxes. These things don’t become income taxes just because people figured out how to game tax law to magically turn income into capital gains. What if Romney figured out how to pay no tax at all on his income but then checked the box that says “Do you want to give $3 to pay for Federal elections?” Would that mean he paid income taxes?
On Romney’s foreign taxes ca. 2005, I think this is a *big* reason for his continued tax secrecy. There was a foreign-corporate-income-tax holiday in 2004/5 as part of some misguided attempt at stimulus (later found to have zero effect as stimulus, and it was too late anyway). Temporarily cutting the tax on repatriated income to something like 4% from the normal 35%. Did Romney take advantage of this and realize his income in Bain funds as regular corporate income rather than carried interest in this year? It’d be very interesting if he did something like this, because he’s now proposing a 0% holiday of the same type, and an eventual transition to a permanent 0% rate, allowing Bain and its ilk to realize all of their income in foreign shell corporations and pay very low tax rates such as those on Grand Cayman.
The other reason probably has to do with 2008/2009 tax weirdness associated with the market crashes. What are the odds that Romney made a good bet at the time and profited while people without his connections lost all their savings? One of the worst possible things for Romney, politically, would be if he actually did pay a lot of taxes in those years because he made a boatload of money while everyone else lost their jobs. The only thing worse would be if he did all that and still managed to avoid paying taxes.
Also his foreign taxes paid probably dropped a lot in 2009 naturally because of that whole global financial crisis thing. It’s difficult to guesstimate his financial history… there’s one sort of document that would make this a lot easier, though.
Look, it was extremely stupid of Reid to say that he was told that Romney paid no taxes. Romney paid sales taxes, property taxes, etc., so he can rightfully claim that it’s a lie. Reid should have been more specific in his charges.
But when you think about it - haven’t the GOP been peddling the line about how roughly 50% of Americans pay no taxes - when, of course, they really mean “no federal income tax”? I think that what Reid has done here is force the discussion of that issue towards saner territory as well.
I have to say one thing about the supposed ethical debate. It’s absolute horse-shit. Everyone lies and does so on a regular basis, for causes they consider legitimate and good - whether it be to make a spouse feel happy about a new haircut, a child feel more confident at school or a friend feel more confident about their chance on the job-market. The fact is that we all lie, we all give ourselves a pass and we all do so constantly. We have no right to start being prissy about the ethical aspects of what Harry Reid is ALLEGEDLY doing here - unless we are prepared to be grossly hypocritical about our own lives and moral conduct.
Added to which, we don’t even know that Reid is lying - a point which seems to have been missed amid the gratuitous pearl-clutching.
Could we please stop the casting of first stones on this issue?
Amen. I am absolutely amazed that a man who twice blogged that American democracy might be at stake in this election has complained about what Reid said, without having any evidence at all that Reid is wrong, and when unlike many Republican lies, Romney could clear the issue up quickly and easily, His refusing to do so adds weight to what Reid says, not that prof. Kleiman seems to notice.
There is nothing unethical at all about what Reid did if he told the truth as he understands it, and there is no evidence at all that he did not other than the words of a man with an extraordinary record of shameless lying.
Surreal.
This is even worse than your first post. Your headline - what. you’re just asking? And then your last sentence, “what Reid did was unfair, but if those guys had any sense they’d just suck it up and go back to telling their own lies…”
So you’re still calling Reid a liar, but now you’re pretending that you didn’t say it.
i respectfully decline to participate in your hallucination.
The distinction between whether Reid is telling the truth and whether his source is telling the truth is best summarized by a thirty year-old exchange from “Cheers” (when Coach, not Woody, was Sam’s second-hand man). The scene started when Diane’s stuffy professor-type boyfriend entered the bar, and it went something like this:
Prof. Sumner Sloan: Over dinner last night, I was told that Diane Chambers works here. Is that true?
Ernie ‘Coach’ Pantusso: Gee, I don’t know. I wasn’t there.
http://business.highbeam.com/3972/article-1G1-84874537/mitt-hits-obrien-hubby-enron-ties
In 2002, Willard was so into disclosing tax returns that he demanded that the husband of his opponent must release his, and that he was hiding something otherwise
In 2002, Willard lost every debate and blinked his way through a multitude of lies, but the idiot sexist voters thought O’Brien was “bitchy” because she whipped the shit out Mittens. So they thought she must be wrong. Wait for the debates, Grasshopper. And watch of incessant blinking-a sure sign of Mittens lying.
Republican candidate Romney could have avoided paying federal taxes for 20 years but for each year he paid a nickle in “sales” taxes he could claim to have paid “taxes” in that year.
Right-wing sycophants have been quick to defend Romney’s secretive international tax labyrinth while simultaneously pissing on anyone that calls it out for what it is: Tax avoidance that sure looks criminal and sure should be if things were fair.
Republican Romney didn’t pay for the streets he drives on, didn’t build them, and failed to fight to keep them safe.
Romney avoided service by hiding in French mansions during Vietnam, avoided paying taxes with secretive Swiss and Cayman shenanagins funded by killing American jobs and gutting American corporations, and will do even worse things if elected.
To complete the speculations, emptywheel (via Duncan Black) has a lovely one. Pious Mormons tithe, and there’s some dispute about whether this should be pre- or post-tax. So officials of the Church of Latter-Day Saints have to be added to Megan’s shortlist of people in a position to know about Romney’s tax fiddles, and to the shorter list of those who might have a grudge about them. Harry Reid is a fellow Mormon. The theory also givea another motive for concealment of the tax returns: cheating on tithes would damage his God-fearing image far outside the confines of his own faith.
James Wimberly, I have known a fair number of Mormons, with whom I have actually discussed tithing. The issue of tithing pre- or post-tax is the topic of idle argument in most Christian communities (though it’s almost always resolved in favor of “post tax” for the obvious reasons.) However, I have never heard that Mormons were required to show anyone their tax returns to prove that they were in good standing, nor does the post you link suggest as much. It is certainly not common practice within any other church I’m aware of; if you are faithful enough to tithe while living in Massachusetts, you are probably faithful enough that you believe that God will observe, and disapprove of, your cheating.
With a story like this, as with the Bush ANG records or the SwiftBoat Vets or the ludicrous accusations against Clinton, the object should not be to see whether there are any conceivable circumstances under which it might be true, especially when doing so involves fairly elaborate concoctions about a faith we’re not very familiar with. The question should be, is it likely that Harry Reid has a source who a) is a Bain investor as described and b) has seen Mitt Romney’s tax returns? The only person who is likely to fit both descriptions is Mitt Romney. Failing one or the other, Harry Reid is either lying to us, willfully passing on the lies of someone else, or so gullible that it may be time to see if he doesn’t need a legal guardian appointed to protect him from the sort of scams that so tragically victimize so many people of Reid’s age.
Megan,
Again, I think you view the possibilities too narrowly.
It’s surely plausible that Romney, in discussions with a Bain investor, described how investments were structured to minmize or eliminate taxes. He didn’t have to be in the business of selling tax shelters. A real estate agent trying to get you to buy a house will mention tax advantages. Evaluating tax consequences of investments is a normal and sensible part of making decisions about them.
Since Bain investors were committing substantial sums it would be very surprising if they didn’t want to know a great deal about the tax consequences. Hence it is far from impossible that Romney explained the structure, along with comments to the effectthat hehad paid no taxes (or no taxes on these investments) for ten years. Of course there’s another issue here as well. If it wasn’t a tax dodge, why keep money in the Caymans at all? I’ve commented before that Switzerland could be defensible as a hedge against financial catastrophe in the US - the sort of thing Paul Ryan might create. But the Caymans aren’rt going to protect you from that.
BYomtov: Again, investments that are structured to eliminate tax liability are largely a collective memory of shelters that no longer exist. And given that we know he has diverse sources of income, at best he’d be swapping tips on the income for a particular tax shelter, not all of his income. But as someone in a profession where lots of people swap tax-avoidance tips about what’s deductible, I’ve certainly never had anyone tell me what their total tax bill was, though people do brag on their accountant. That’s a pretty private thing. Possible? Anything’s possible. Likely enough to take the source seriously and repeat it without backup? C’mon. Not even remotely. Especially since Reid is kinda rich himself and probably has a pretty sharp accountant.
James Wimberley: Apologies for spelling your name incorrectly. As someone whose name is usually spelled incorrectly-IIRC, I believe at least once by you-I know it can be annoying.
Onto the substance. Reid claimed that his source was a Bain investor in the original interview in which he dropped his little bomb: http://www.huffingtonpost.com/2012/07/31/harry-reid-romney-taxes_n_1724027.html
“Saying he had “no problem with somebody being really, really wealthy,” Reid sat up in his chair a bit before stirring the pot further. A month or so ago, he said, a person who had invested with Bain Capital called his office.
“Harry, he didn’t pay any taxes for 10 years,” Reid recounted the person as saying.”
You don’t actually know how many employees his accountant and lawyer have-some of the top firms are very small indeed. But leave that aside. I have given reasons that I do not think it is one of those people, being primarily that:
1) It is vanishingly unlikely to the point of absurdity that Mitt Romney had a $0 tax bill for ten years, and a professional should have known that
2) Harry Reid identified the source as a Bain investor, and with the exception of Romney’s personal tax lawyer and maybe, but probably not, his accountant, none of the people you have mentioned have the kind of money required to invest in firms like Bain Capital. If his source is one of those other people, then Harry Reid is lying to us.
On a side note, if the source is actually correct, it is virtually certain that everywhere except the IRS have checked the computer to see if the file was accessed. Even in a fairly simple system, there will be an IT audit trail. There will also be Republican employees who could fairly easily expose that audit trail and expose you to, oh, all manner of trouble. So no, I don’t think that this would be likely. Remember, even your accountant does not know offhand what you’ve paid for the last ten years. They have to pull the file.
The cumulative probability that
1) Mitt Romney actually paid “no taxes” for a ten year period that would be exposed by releasing his 1999-2009 returns
2) A Bain investor saw those returns, given that “Bain investors” have no entitlement, ability or reason to obtain Romney’s tax returns, and of course, that Romney left Bain, and indeed Boston, in 1999
3) Said Bain Investor decided to call Harry Reid up and tell him this
. . . is about the same as the odds that an Air National Guard Lieutenant Colonel had gotten a hold of an IBM typesetting machine and played with the tab stops and font balls until he could, for a memo about Bush’s ANG performance to his own private files, produce something that would look exactly like what you’d get if you typed the memo in Microsoft Word. It is possible, in this mysterious universe of ours-halfway through the weeklong conference from which I just returned, I realized that one of the other attendees was a Canadian friend of my college roommate, with whom I spent a memorably inebriated evening sitting on the roof of College Hall in 1993. But it is so unlikely, compared to the alternative-someone who doesn’t like Mitt Romney is either misremembering or exaggerating something he was told, or making it up out of whole cloth-that an honorable adult would not repeat it without, at the very least, more evidence than anyone has offered.
It’s possible that Harry Reid is a pedophile, a murderer, or a thief. I can imagine all sorts of scenarios in which this might be true, and all sorts of people who might have knowledge of his crimes, and motive to reveal them. And he certainly hasn’t proven that he isn’t. But I have no knowledge that this is actually true, which is why I would never say such a thing.
BYomtov: Again, investments that are structured to eliminate tax liability are largely a collective memory of shelters that no longer exist.
Megan,
Just so it doesn’t get lost, I’d like to make sure you see my comment above on this matter, and the date of enactment of the FATCA, and the fact that it did indeed close a major tax avoidance scheme. I’ll also repeat here that no fancy shelters are needed if your income is secret anyway, and that I am unaware of any reason for keeping funds in thhe Caymans that has nothing to do with taxes.
It’s not necessarily a question of tax shelters that eliminate taxes but of actions that defer taxes. And as per Byomtov, someone with financial info about Bain wouldn’t necessarily have had to see Romney’s returns, they could make a pretty good guess about the taxes he pays on what was presumably his main financial investment.
Bernard: Leaving money abroad isn’t avoidance, it’s evasion. It’s illegal, not a “loophole”, just like the fact that people in cash businesses can avoid tax is not a “loophole”, but criminal behavior. I think it’s perfectly possible, even probable, that this is what Romney is hiding-but not that he showed $0 on his tax return. We know he has US source income, and so did the IRS.
There are apparently genuine reasons for hedge funds to incorporate in the Caymans that have nothing to do with tax-it’s lovely, their financial regulations are light-but I agree that this is why most people go there. But remember that the US is the only country which claims the right to tax worldwide income, so for citizens of other countries, this is not necessarily illegal.
By the way, I wasn’t claiming that FACTA had impacted Romney directly, just pointing out that we now require foreign banks to report. As a matter of fact, however, regulators in other countries tended to cooperate before the law (Switzerland was an outlier, which is why people put their money in Swiss bank accounts, and not, say, German bank accounts). And Romney had a legal obligation to disclose long before he did, if indeed he did take advantage of the amnesty.
The derivative “dividend equivalent” scheme that you describe is not, by the way, a permanent way of avoiding tax. It’s a way of delaying tax. If you want to access the cash embedded in your derivative, you have to sell, triggering a capital gain-which is taxed at the same rate as your dividend. One can argue about whether this should be the case-complicated transactions like this are why I tend to favor a progressive consumption tax, or some sort of VAT + refund scheme. But it doesn’t eliminate your tax bill, just delays it-and then the income won’t show up on your return, for the same conceptual reason that any home price appreciation you may experience is not a taxable event.
Brian Schmidt, I can probably take a reasonable stab at how much David Brooks pays in tax. But you’d be an idiot to repeat it on the grounds that “a journalist” told you how much he pays.
Megan,
Sorry I wasn’t precise in my terminology wrt avoidance vs. evasion. OK, he was possibly evading.
If you didn’t think FATCA was relevant to Romney’s pre-2010 returns - the ones he insists on concealing - then why bring it up at all? And who cares if Germany was cooperative with the IRS? The question is whether the places Romney actually had his money were.
I don’t think your distinction between delaying and avoiding taxes is all that strong. Delay long enough and the delay is worth a good bit. Delay paying $1 million for a couple of years and you’ve saved yourself some money - maybe not a lot by Romney standards but that’s hardly relevant. If Romney blatantly stole $10,000 we wouldn’t excuse it on the grounds that it’s just pocket change to him.
And the conceptual reason we defer taxes on home appreciation, and long-term capital gains in general, does not really fit the dividend swap scheme. In the case of long-term gains the reasons, sound in some cases, are that the taxpayer may reasonably lack the cash to pay the bill without selling the asset, and that if we did impose a tax on unrealized gains we would have to deal with unrealized losses as well. So we wait until we have a final outcome. But that problem does not arise in the dividend swap. It was purely a dishonest, if legal, tax avoidance scheme.
Bernard: I’m not defending the particular scheme; as I say, I think it’s worth changing the tax code to get rid of most of this stuff, but the American public disagrees with me, and there you are. Practically, it is very, very difficult to collect capital gains tax before the gain is realized in cash. I’m a little bit surprised that the IRS hasn’t gone after these swaps on a “sham transaction” rule, but if they haven’t, it’s likely because it’s actually quite hard to legally distinguish these from legitimate transactions undertaken for hedging purposes. I don’t subscribe to the Triumph of the Will view of the tax code; the fact is, if you add a lot of complexity in some attempt to replicate some platonic ideal of tax distribution, you are creating opportunities for avoidance. Nor do I think that paying taxes has some sort of independent moral content, like bans on stealing or murder; the rules are the rules, and as long as you are within the rules, I wouldn’t characterize any transaction as “dishonest”. Hiding money abroad, on the other hand, is both dishonest and illegal.
I brought the new reporting rules up because you seemed unaware of FACTA, and I thought you might be interested to know that there is, in fact, a reporting requirement. Apologies if this misled you.
The reason I am pounding the evasion/avoidance distinction, and pointing to timing/tax preferred is that a number of people on this board seem to be under the impression that they can catch Romney with a tax rate that approaches, or equals, 0%, and that rich people can somehow get away with not paying taxes. But delayed income doesn’t show up on your return at all; it’s not in the denominator, so it doesn’t depress the effective average tax rate. If Romney has been entering into these sort of elaborate avoidance schemes, they will show up as lower AGI, not as a zeroing out of earned income. And it’s not clear to me that you could detect the swaps from the returns; most of the stuff that’s actually filed is aggregates, not details.
On a side note, because you brought it up, while the delay is valuable, it’s not that valuable. You still eventually have to pay 15% before you can use the cash; the main difference is that you give your money some extra time to grow. It’s really valuable in a 401(k) because you don’t have double taxation (income then capital gains); instead you just pay the income tax when you take the money out. But the actual actuarial value of a delay is somewhere between the interest on treasuries or corporate bonds-i.e. a few percent a year, of the tax bill, not the total income. You have to leave the money untouched for a very long time before you get to a 50% savings on your tax bill. So while I’d like to see the tax code rewritten to make these dodges obsolete, they’re not that high on my agenda, either.
Megan: “I can probably take a reasonable stab at how much David Brooks pays in tax. But you’d be an idiot to repeat it”
Here’s a better analogy. Say you worked at The Atlantic for 10 years which had structured its compensation so you paid no tax. Say Romney also worked at the Atlantic for 10 years.
If you claimed Romney paid no taxes you could still be wrong - maybe he does a little freelance work on the side. But in essence you’d be right, and his indignant response that he paid taxes every year (how much?) would just be misleading.
When did Reid claim that his source was a Bain investor? SFIK this is a follow-up by CNN reporter Dana Bash, citing “sources close to” Reid. If the claim is false, Reid is not lying because he never said so en clair. Engaging in dirty pool, no doubt.
I notice you have now shortened your list of credible sources to exclude the Romneys’ accountant and lawyer, which as I pointed out refers to firms with dozens of employees. You also omitted the IRS, which would be another credible source. True, a paralegal or IRS clerk who gave Reid information about the Romney taxes would be in grave breach of professional ethics and probably the law as well. But they might well have thought that protecting their country from a plutocratic coup d’état led by a sociopath was the higher duty. We praise Abwehr officers like Hans Oster who committed treason against the Third Reich.
BTW, my name is spelled correctly above everything I write here.
There is another possibility. Reid may have LDS inside baseball. He can’t say that that’s how he got the information, but it also would mean that Mittens is not universally loved by his brethren, despite his enormous “donations” (a.k.a. tithe). This may fall into an entirely different “true but unethically obtained” category. And we know for a fact that no Republican strategist would ever turn down such information. We simply can’t afford one party lying and cheating its way through every election and the other taking the higher ground and tying its own hand behind its back. Don’t ever forget that it is *Republicans* who routinely accuse Democrats of stealing elections-and it’s not like they need evidence.
Oh, for FSM’s sake. Now McArdle is protecting George W Bush against accusations that he went AWOL. Note these are accusations that essentially no-one meaningfully denies (ie, Bush had no permission to stop reporting to his station in Texas and transfer to Alabama, and did not report for duty in Alabama, and did not maintain his medical status for flight nor meet his flying hours requirement), although the documents somehow provided to Dan Rather as being contemporaneous records of the story were apparently not genuine.
I have not stated that he maintained his flight status, etc. Bush’s story about transferring to a largely defunct unit in Alabama that didn’t need him may not seem particularly plausible-I suspect it isn’t true-but it hasn’t actually been disproven. And the documents that purported to offer the proof were indisputably forgeries. Which a surprisingly large number of people defended on the grounds that it would have been possible, with a sufficiently unlikely succession of events, to produce something like those memos. This was embarrassing to watch. Moreover, the memos purported to prove a quite particular, and quite strong version of the gaps-Bush being actively AWOL and defying orders-rather than what I suspect was more likely, which is that Playboy George was having some sort of personal problem which was quietly dealt with because his father was a moderately prominent citizen.
It is quite probable to me that Romney has something on his tax returns-like a negotiated amnesty agreement for a Swiss account-that he is hiding. (Though not 100%. I’m consistently surprised by the number of supposedly bombshell documents that turn out, when released, to be total duds.) But the particular thing of which Reid is accusing him is virtually impossible to achieve in the modern tax code. Modern tax avoidance transforms income into more tax advantaged forms like capital gains, delays recognition of income so that you can pay the taxes later, and in the case of muni bonds, allows you to pay a slightly lower implicit tax by loaning money to municipal governments at below-market rates. There are various dodges with revertable charitable trusts, but only for heirs, and only for the period for which the charity has the money-you can’t have and spend the money, and also pay no taxes on it. The things like passive loss deductions that allowed people to show huge income and then reduce their tax bill to zero haven’t existed for almost 30 years.
But even if I thought that the Reid version was likely, the source is not. It is possible that Romney told someone who invested in Bain exactly how much income tax he paid for a ten year period ending in 1999-2009. But “it could have happened that way” is not nearly enough to defend a really rather unlikely claim. How many of your friends, coworkers, or churchmates know your marginal tax rate, much less how much tax you’ve paid over the last ten years?
It’s fun to conjure cigar-chomping plutocrats who spend all their time congratulating each other on their schemes for looting the Republic, but despite a fair amount of time covering these sorts of people and the events they attend, I’ve rarely met anyone who talks about either their salary or their tax bill. (It’s well known within the banks how much everyone makes, but that’s because of the compensation committee leaks, not because people run around saying “I made a zillion dollars!”-not that they’d be believed anyway.) And everyone who has profiled him, including me, seems to have concluded that Romney is rather careful and private even by the standards of other financiers and politicians.
You’re going to an awfully large amount of trouble to imagine scenarios in which it might just possibly be that Romney’s not hiding anything.
The problem with your argument is, his tax returns are clearly related to the job he’s applying for, and the longer he waits the stupider he will look. So I’m not sure why you’re wasting your energy on this argument that holds pretty much no water. This is not a case of someone asking him if he’s stopped beating his wife. The questions are fair, and he should have just outed himself on his tax evasion last year. Obviously, people on your side don’t think it’s that bad.
Remember, being a free rider is supposed to be wrong. No matter how legal it may be, there is no free lunch. As conservatives are always trying to pretend to instruct the rest of us. Even if he come up clean, he’s dirty if he didn’t pay.
I am going to great lengths to point out that it approaches 100% likelihood that Romney is not hiding the thing of which Reid has accused him. I find these arguments very strange from a blog that heads itself “the reality based community”. Does reality include things other than those which actually happened?
Look, it’s possible Romney is innocent of the tax evasion charge. It’s just not very likely. Meanwhile, this idea that the charge itself is somehow unsporting or dishonorable is laughably weak. Romney is hiding something — that *is* a fact. We just don’t know what it is yet. Maybe it will be something legal but slimy. Maybe it will be something both illegal and slimy. And yes, in *theory* there could be some entirely innocent explanation.
But these attacks on Reid won’t work, they aren’t credible, and they just delay the inevitable.
Reid has made a specific accusation based on alleged insider information. I happen to think that it matters whether this particular accusation is, in fact, true or likely to be true. I’m sort of shocked to find that some sort of laughably naive minority position here. The belief that someone is guilty of some sort of dishonesty does not mean you can accuse them of any crime that pops into your head.
That is not the same as saying that Reid can’t voice a belief that Romney is hiding something like tax evasion. Bang away on his failure to release tax returns, which is an actual, true, provable thing. This ludicrous story is not, and Harry Reid should know better. But of course, if his base doesn’t care whether the charges he’s levelling are likely to be true in the boring, bourgeois sense of being things that actually happened, then probably Reid won’t either.
Tithing gets to a different issue. Anne Romney and others have said repeatedly how generous Mitt is because he “donates to our church”. Tithing is not a donation-it’s an obligation. Being a faithful Mormon, gives Romney no choice but to give money to the LDS Church. Whether he does it by building a local temple or sending money back to Utah is irrelevant. But here’s the real question-how charitable is Mitt Romney? Does he give significant donations to anyone other than the LDS? I’ve never heard him, his wife, or anyone else on his behalf brag how charitable the Romneys are toward any other charity. Does Mitt donate to anyone else? We know that Anne has donated to women’s health organizations in the past and battered-women charities. But all that stopped when Mittens decided to run for President. But it is a perfectly valid question to ask if Mitt donates to anyone other than LDS causes.
Congratulations, Mark. You are now being defended by Megan McArdle, who like you knows for certain - based on her unparalleled knowledge of tax law, the lives of wealthy Mormons, and the operations of Bain - that Reid must be lying.
I look forward to your next post: Nancy Pelosi, Dirty Liar?
http://www.huffingtonpost.com/2012/08/06/nancy-pelosi-harry-reid-romney-taxes_n_1746894.html?ncid=edlinkusaolp00000003
I didn’t say I knew he must be lying. I said that the probability of a lie somewhere in the supply chain is too high for an honorable adult to repeat it without better support. I find it telling that everyone in this thread needs to strengthen my caveats in order to contend with things I haven’t said, rather than defending their choice to defend a statement with a high probability of being untrue in the particulars.
I find it telling that you are arguing on the basis of your own suppositions and elevating them into facts by some crude rhetorical sleight of hand. This ain’t the Atlantic where you could rely on your fellow Ayn Rand groupies to cover for your elementary logical blunders. Too many people remember that you couldn’t handle multiplication by powers of 10, that you confused statistics and hypotheticals, and that you managed to blame your own mathematical ineptitude on .. why yes.. gastritis!
@megan mcardle-so you really don’t know.
You said that the probability of the absence of a lie is zero:
“The cumulative probability that
1) Mitt Romney actually paid “no taxes†for a ten year period that would be exposed by releasing his 1999-2009 returns
2) A Bain investor saw those returns, given that “Bain investors†have no entitlement, ability or reason to obtain Romney’s tax returns, and of course, that Romney left Bain, and indeed Boston, in 1999
3) Said Bain Investor decided to call Harry Reid up and tell him this
. . . is about the same as the odds that an Air National Guard Lieutenant Colonel had gotten a hold of an IBM typesetting machine and played with the tab stops and font balls until he could, for a memo about Bush’s ANG performance to his own private files, produce something that would look exactly like what you’d get if you typed the memo in Microsoft Word.”
The odds of that happening, we are intended to conclude, were zero. (But why didn’t you just say “zero”? How is memogate a relevant comparison? Sometimes the non-sequitors in your writing rival those in Family Guy.)
Oh, and BTW, Romney did not “leave Bain” in 1999. He continued on as the CEO, Chairman, and sole shareholder. Or perhaps you think that owning a $4 billion private equity firm means nothing.
Oh, and for “honorable adult, remember this?
““Is it irresponsible to speculate? It is irresponsible not to.†And hwo about, “It wasn’t a statistic-it was a hypothetical.” I think we’ll all agree that Reid is a hell of a lot more honorable than Peggy Noonan - or than Megan McArdle, when it comes to that.
Unlike the charitable Mark, I regard Ms McArdle as either a loyal foot-soldier in the Conintern or at best one of its “useful idiots”. So it’s significant she has made one of her rare forays into our comment threads. The suspicious tax concealment - a fact, not an accusation - must be really hurting Romney’s prospects. Let’s keep stoking up the suspicions. What is Mitt Romney hiding?
My brother has the theory that it’s just a bait and Romney will release his tax returns (say at the convention) and they will be pure as the driven snow. Sucks to Harry Reid and a load of lefty bloggers! But what good would that do him after one news cycle? At the very best, they will confirm what we know from the one declaration he has released - he’s a very rich guy who pays less taxes than Joe the Plumber. The delay will help Obama hang the (perfectly true) image of a shifty, soulless plutocrat round Romney’s neck. So I stick with George Will’s smoking gun hypothesis.
So unkind, Mr. Wimberley, and me so fond of you. I’m afraid you’ve just triggered my interest in the taxation issue, and in the mental process that makes people offer increasingly strained defenses of obviously unreliable information that would, if true, be very bad for your political opponents, and would, if said about their own side, be sending them into paroxysms of righteous rage. I’m certainly no enthusiastic Romney supporter, and if I were, I’d hardly be arguing that he’s quite possibly hiding something gnarly.
So many words! On behalf of such a rich asshole!
I mistakenly thought that the underlying facts were what mattered, not the target.
So you have changed the habits of a lifetime and decided that facts matter? You, Megan McArdle, the most consummately fact-free glibertarian of our age? Now this is a hoot and a half!
If you cared for the facts, have you criticized Romney for his zombie lies? Or do they all happen to be outside your personal purview, Ms. McArdle? Or do you only get into the fray when one of the Republicans gets unfairly accused? I’m not as charitable as Mark or James. I believe one should only throw around accusations of unreliable information when they have a record of fighting the same coming from others. Mark has such a record. Do you? Every Friday, Steve Benen posts a list of Romney’s weekly lies (and he only samples a few, leaving most of the banal ones behind). Have you ever followed up on any of those? Have you defended Obama against, say, the accusation that his campaign is disenfranchising the military in Ohio? See under “Stones”, “Glass houses”, etc.
I know defending the biggest, richest prick in the U.S. is right in your comfort zone, but sister, *think* of how you’re spending your life. With so much talent with the words!
“Strained” is a projection in this context.
Megan clings exclusively to a small thing - it is unlikely that a Bain investor would have conclusive proof of every aspect of Romney’s tax returns for ten years.
She’s not interested in the big thing - a Bain investor may know much about how Bain’s investments are structured and that investor may have info on how to defer taxes for ten years on those investments.
Is it true? I don’t know, I’m not the Bain investor nor do I have Romney’s ability to clear it up instantly.
One side question on this - Reid’s known for sharp elbows. Is he known for spreading poorly-sourced information? The two things aren’t the same.
Megan McArdle is declaiming on what constitutes honorable adults? In defense of RMoney? Truly this is the most delicious comment thread on the intertrons today.
I’m changing my mind. There’s got to be something pretty interesting in those tax returns, that spawns such epic defenses (all hypothetical).
There’s a peculiar approach to Reid’s comment here - is what he said exactly, precisely accurate?
That seems like the wrong question. Rather, did Romney pay no taxes or essentially no taxes on the riches produced by Bain - on the millions he has collected as part of his retirement deal with Bain. I know nothing of tax accounting, but I know something of the ways in which statements morph, even in a single retelling. I would bet that Reid was told that Romney paid *essentially* no taxes (or other words to that effect). Reid’s reporting - that Romney paid zero taxes - does seem incredibly unlikely, but the difference between “zero taxes” and “essentially no taxes” (or no taxes on income from Bain or words to that effect) is non-existent in any practical sense as relates to his political predicament. If he releases his taxes for the decade, he can prove that Reid is technically incorrect, but pragmatically very accurate. Thus he is between a rock and a hard place.
As to Ms. McArdle’s attempt to demonstrate that someone is lying - when it comes to inconvenient data, someone almost unexpected always knows. The attempt to use probability here is inappropriate, it is an attempt to estimate the probability of a black swan. In some sense, there is always a black swan.
My personal take is that Reid spoke his truth. Was he lied to? that is unknowable. But as long as the information is available, and Romney is not forthcoming, I have to believe that there is an essential truth in what Reid said.
Digby (http://digbysblog.blogspot.com/2012/08/villager-pearl-clutching-jonathan-karl.html) just posted a highly relevant observation.
“Joe Conason and Juan Cole have both written about the legal doctrine known as the “missing evidence instruction” which explains better than anything why Jonathan Karl and the rest of the doofuses who are rending their garments over Reid’s ploy are wrong:
“There is a legal doctrine that applies to Romney’s current behavior, as Indiana attorney John Sullivan points out – and it doesn’t place the burden of proof on Reid:
” At law, if a person in control of evidence refuses to produce the evidence, then the jury is instructed that there is a presumption that the evidence would be against the party failing to produce. It is called the “Missing Evidence†instruction.
“The missing evidence is in Romney’s grasp, yet he insists that he will never produce it. Does anyone need instruction from a judge to make the correct inference.
Here’s how Illinois law defines it:
5.01 Failure to Produce Evidence or a Witness
If a party to this case has failed [to offer evidence] [to produce a witness] within his power to produce, you may infer that the [evidence] [testimony of the witness] would be adverse to that party if you believe each of the following elements:
1. The [evidence] [witness] was under the control of the party and could have been produced by the exercise of reasonable diligence.
2. The [evidence] [witness] was not equally available to an adverse party.
3. A reasonably prudent person under the same or similar circumstances would have [offered the evidence] [produced the witness] if he believed [it to be] [the testimony would be] favorable to him.
4. No reasonable excuse for the failure has been shown.” IPI Civil (Supp. 2003) No. 5.01.
“No reasonable excuse for the failure has been shown. These are documents that presidential candidates routinely provide and thre’s nothing stopping him from doing it. But for the first time in history, the press and many commentators have decided that it’s indelicate to cite an anonymous source who claims to know why they are not being released. “