The Tax Fiasco
9 August 2012, 12:02 PM
A thing about the tax fiasco that hasn’t, I think, been sufficiently highlighted by Left Blogovia is that Harry Reid isn’t accusing Willard “Mitte ” Romney of a crime. He’s saying (that his source claims) that Mr. Romney quite legally paid no income tax for ten years.
By the way, things like this note, which does focus on the legal nature of the tax minimization, gets too hung up on whether Mr. Reid really has a credible source. All we would need for that, really, is somebody who was investing in (or considering investing in) Bain or one of Bain’s deals, who asked whether the tax set-up was kosher and was told Hey, we’re all clean here—Mitte hasn’t paid any income tax at all for ten years and the Governor! I find it totally plausible that some big-money Dem was, at some point, putting money into a Bain deal and was told that by somebody at Bain. Which isn’t really relevant to the foofaraw, when you get down to it.
What is relevant to the foofaraw, I think, is that Willard “Mitte” Romney (a) is very, very rich, (2) he gets richer and richer and richer, in quantities that most of us would find absurdly large, without (evidently) doing any paid work whatsoever, and (iii) the amount of taxes he pays, while quite likely very large in absolute numbers, is probably fairly small when viewed either as a percentage of his wealth or as a percentage of the increase in his wealth. I would like to know, myself, what his net worth was when he (ahem) left Bain in 1999, what it is now, and where all of that new money came from during those years of unemployment or unpaid employment, and how much tax he paid on that new money. But I doubt that he cheated. And even if you might possibly suspect that he would be willing to break the law, or (as with the undocumented workers his landscaper hired) people working for him might break the law to his benefit but without his knowledge or approval, that’s not what Sen. Reid said.
What Sen. Reid said that is that he didn’t pay taxes for ten years, and that he would be embarrassed to admit it, because it would look so lousy. There were (according to Politifact, which was disliked the Senator’s statement) more than twenty thousand people with income over $200,000 that paid no income tax. Of course, Willard “Mitte” Romney made twenty times that $200,000 mark in 2010—and by made, I mean reported as Adjusted Gross Income, which is a different thing than the difference in wealth from one year to another. Still and all, it’s not only possible for rich people to pay no income tax but actually done, and done by twenty thousand people a year. Not to mention that it’s plausible that either Sen. Reid or the putative source said didn’t pay taxes and meant something more like paid 1%. Which has the trouble of being, you know, next-to-nothing, while still being a gigantic fuckload of money. If you could buy my house with that nothing, it’s not nothing—but it’s also nothing, in terms of what the federal government might expect to take in from the extremely wealthy.
Which leads me to point out… what is also relevant to the foofaraw is that during all that time, Senator Harry Reid has participated in and presided over a legislative body that sets the rates at which people pay taxes. He was Whip from 1999 to 2005 and Leader since then. His views on the relative tax rates of millionaires are important. His views on the differing rates of capital gains and earned income are relevant. His views on the rules governing retirement accounts, shell corporations and trust funds are relevant.
In other words, if a very wealthy man paid no taxes for ten years—or even very little in taxes—then it’s Harry Reid’s fault.
Tolerabimus quod tolerare debemus,