by | ARTICLES, HYPOCRISY, TAX TIPS, TAXES
So, Mitt Romney released his 2011 taxes. And on cue, Think Progress rolls out this inane hit piece entitled “By Romney’s Own Standard, His Tax Returns Would Disqualify Him From The Presidency”. The summary of their argument accuses Romney of paying more than his fair share of taxes this year. This implies that he is somehow gaming the system or dishonest.
However, this outrage — besides being just plain stupid — is entirely disingenuous. Why? Because in 2010, Romney actually DID pay more than his fair share of taxes, and when it was discussed in January after the release of his tax return, no media outlet said a word about it. I know this because I wrote about it.
Here’s the scoop:
I reviewed Romney’s returns for several different media outlets. In my article, and with discussion to the media, I pointed out this fact:
However, the most stunning information on his return is the fact that, due to inequities inherent our tax code, Romney paid taxes on more than a million dollars of income that didn’t exist.
The problem arises with regard to Romney’s hedge funds, and how he must record income and expenses:
From the income items, off comes the subtraction for interest. However, all of the other expenses that reduce profit – which, with hedge funds, include virtually all operation expenses to earn income, including fees to the operators – are required to be recorded as miscellaneous itemized deductions. You cannot deduct your share of expenses unless that amount exceeds 2% of your AGI. What’s worse, even if your expenses do exceed the threshold, and you are subject to the AMT you can’t deduct them at all. (Romney paid AMT).
This inability to deduct necessary expenses incurred while generating that income means that Mitt Romney paid taxes on $1.017 million of income that does not exist except on paper.
I went on to chronicle my exchanges with Bloomberg, NYDaily News, and CBS Evening News. None of them mentioned this. Out of curiosity, I even sent this off to Fox Business (remember — in January, Romney was not our nominee yet). Still, I received no reply. Then I saw some erroneous information coming out of the Boston Globe, and contacted the reporter for this story, who, after a basic exchange of emails, never followed up with me regarding hedge funds or the tax return analysis.
You can read the article from back in January 2012 in its entirety here.
So, back when Romney’s 2010 tax returns were released, the narrative then was that Romney didn’t pay enough in taxes, and therefore ignored a report that showed Romney did indeed pay his fair share — and then some.
The story picked up very little traction in early July, when Vanity Fair and Politico coordinated a financial smear on Romney. Jay Cost of the Weekly Standard, made mention of the summary of that fiasco, when I was pointing out the hypocrisy of media coordination when it fits a certain narrative.
So now the pendulum has swung. Instead of saying Romney paid too little in taxes, the Left wants us to be offended again but in the opposite vein. By claiming he paid more taxes than necessary — Romney is somehow hoodwinking us again.
He can’t be trusted and doesn’t pay enough taxes. He can’t be trusted and he pays too little taxes. Thus the new message: Romney can’t be trusted with finances at all.
No, the real problem is that we can’t trust the MSM.
Crossposted at RedState.com
Note: I have not had a chance to review Romney’s 2011 taxes to see if the same iniquity occurred. I will post an update when it gets done.
by | ARTICLES, BUSINESS, TAXES
Romney released his 2011 tax return today.
I haven’t had time to review these yet, but the Romney campaign has put out the following notes:
Regarding the newly-filed 2011 Tax Return:
In 2011, the Romneys paid $1,935,708 in taxes on $13,696,951 in mostly investment income.
The Romneys’ effective tax rate for 2011 was 14.1%.
The Romneys donated $4,020,772 to charity in 2011, amounting to nearly 30% of their income.
The Romneys claimed a deduction for $2.25 million of those charitable contributions.
The Romneys’ generous charitable donations in 2011 would have significantly reduced their tax obligation for the year. The Romneys thus limited their deduction of charitable contributions to conform to the Governor’s statement in August, based upon the January estimate of income, that he paid at least 13% in income taxes in each of the last 10 years.
Additionally, it seems that PriceWaterhouseCooper has compiled a summary of Romney’s preceding 20 years of tax returns:
Regarding the PWC letter covering the Romneys’ tax filings over 20 years, from 1990 – 2009:
In each year during the entire 20-year period, the Romneys owed both state and federal income taxes.
Over the entire 20-year period, the average annual effective federal tax rate was 20.20%.
Over the entire 20-year period, the lowest annual effective federal personal tax rate was 13.66%.
Over the entire 20-year period, the Romneys gave to charity an average of 13.45% of their adjusted gross income.
Over the entire 20-year period, the total federal and state taxes owed plus the total charitable donations deducted represented 38.49% of total AGI.
I’ll update things once I have a chance to compare them to my analysis I did for various media outlets on the 2010 tax returns
by | ARTICLES, ECONOMY, HYPOCRISY, TAXES
QE3 started this week — $40 billion a month for an unlimited amount of time.
According to Bloomberg, Bernanke said, “We’re looking for ongoing, sustained improvement in the labor market,”. “There’s not a specific number we have in mind. What we’ve seen in the last six months isn’t it.”
So here we have a Federal Reserve who is supposed to be independent. It’s clear instead that the Fed is just doing the bidding of Obama — whose policies have failed to produce the results that the Fed is now trying to now create with another round of quantitative easing.
But support for quantitative easing is just another blatant example of political hypocrisy. The rationale behind quantitative easing – that it spurs investment – is vilified by the Democrat leadership when the same strategy is applied to “tax cuts for the wealthy”.
Bernanke, Geitner, the Fed, and the liberal members of Congress all supported and pushed QE2. They argued that purchasing huge amounts of Treasury securities would reduce long term interest rates. The effect would be stimulative because this action forces the other potential buyers to do something else with their money – invest in higher risk and more economically stimulative activity.
Yet aren’t these the same people who are against tax cuts for the highest-income earners? Their argument is that those higher income earners would not put their tax savings for economic stimulative use. This is simply untrue.
The supporters of quantitative easing praise lower interest rates but not lower tax margins? They laud investment as a key strategy for economic recovery – but only when it is artifically and unconventionally controlled by the government? “The rich” should not be able to invest their own money, but have to give the government more (for them to invest it)? This patent double standard is both calculated and conniving — and it ultimately endangers the economic future of this country.
QE3 just makes the economic situation worse, especially because of its open-endedness. We now face the growing threat of inflation and the fall of the value of the dollar, a cut in our credit rating, and increased federal debt (as if we don’t already have enough). Couple that with our looming tax increases for 2013, and we have both consumers and investors who are uncertain about what to do with their money anymore. . Plain and simple. That hurts, not helps.
More government interference is not the solution to our economic problems.
by | ARTICLES, ECONOMY, POLITICS, TAXES
US Credit Downgraded again on QE3 move: From MarketWatch
“SAN FRANCISCO (MarketWatch) — Egan-Jones Ratings Co. said Friday it downgraded its U.S. sovereign rating to AA- from AA on concerns that the Fed’s new round of quantitative easing, or QE3, will hurt the U.S. economy. The ratings agency said the Fed’s plan of buying $40 billion in mortgage-backed securities a month and keeping interest rates near zero does little to raise GDP, reduces the value of the dollar, and raises the price of commodities. “From 2006 to present, the US’s debt to GDP rose from 66% to 104% and will probably rise to 110% a year from today under current circumstances; the annual budget deficit is 8%,” Egan-Jones said in a note. “In comparison, Spain has a debt to GDP of 68.5% and an annual budget deficit of 8.5%.”
by | ECONOMY, GOVERNMENT, HYPOCRISY, TAXES
Over at Red State, Dan Spencer calls attention to the fact that today is a notable day:
“Deficit Day” is the date by which federal tax revenues run dry and the federal government begins adding even more debt on top of our exploding $16 Trillion national debt. This year Deficit Day falls on September 10th.
Two economists, James R. Harrigan & Antony Davies, stress the importance of this observance in their great article:
If lawmakers produced a balanced budget, Deficit Day would occur on December 31st, when the government spent the last dollar of its annual tax receipts at the stroke of midnight on New Year’s Eve. But we haven’t seen a balanced budget since the Eisenhower administration.
Conventional wisdom holds that the Clinton administration ran surpluses. But this is a twisting of the facts. It is true that the debt held by the public-which excludes money the government borrows from the Social Security trust fund-declined by $433 billion from 1997 to 2001. But, over those same years, the government borrowed $827 billion from the Social Security trust fund. In other words, the only way to claim that the Clinton administration ran surpluses is to admit that the government has no intention of paying back that $827 billion it borrowed from Social Security.
The latest that Deficit Day has fallen in the past 40-some years has been mid-December, at the end of the Clinton administration. The earliest was the beginning of July, during the Great Recession in 2009.
I particularly like the part about the Clinton surplus and Social Security. The logic of declaring Clinton surpluses is the same logic inherent in the idea that Social Security is Pay-as-you-go (PAYGO), about which I have written many times.
The gimmick accounting that our federal government employs would get you thrown in jail in the private sector. The gimmick borrowing-plus-money-printing that our government employs would make you ineligible to be credit-worthy for anything.
It’s Deficit Day!
by | ARTICLES, BUSINESS, ECONOMY, HYPOCRISY
During recent campaigning, Obama has continuously exhorted the value of the auto industry. He went so far as to use their success as an example for bailing out other industries. During his famous “You Didn’t Build That” Speech, Obama said something that has been somewhat overlooked by his other immortalized phrase:
“I said, I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back,” he said. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.
You can view the video here
But a couple of weeks ago, the Treasury Department issued an updated report on the auto industry bailout.
The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That’s 15 percent higher than its previous forecast.
The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout.
Shares that day were at $20.49
Under Obamanomics, a $25 Billion loss of taxpayer money is considered “a success” and “roaring back”. The spin is that the losses are less than the estimated $44 Billion, so hey, it’s okay! We saved the taxpayers $19 Billion!
Then, at the end of August, it was announced that the production of the highly touted Chevy Volt was to be suspended for a month. From Automotive News report:
“GM will close its Detroit-Hamtramck plant from Sept. 17 until Oct. 15, one of the sources said. Union representatives last week told the plant’s roughly 1,500 workers about the scheduled downtime, the source said.
It’s the second time this year that GM has throttled back on Volt production. The Detroit-Hamtramck plant was idled from March 19 until April 16 amid swollen Volt inventories.
But we didn’t hear about any of that at the Democrat Convention last week, did we?
And now this morning, Reuters is reporting that
Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.
Our taxpayer money. Sucked down the drain. Propping up an industry that couldn’t make it anymore on its own merits and produces a product that no one wants.
Why do the Democrats keep lying about it?
Remember what he said:
“ I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back,” he said. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.
If he wins a second term, what will Obama do with other fledgling sectors?
More bailouts? Nationalizing other industries? This is legal plunder. This is government welfare. This is wrong.
crossposted at Redstate
by | TAXES
Unemployment fell .2% because so many Americans declined to continue looking for work. Is that hope for those 368,000 last month?
June and July jobs numbers declined. They were revised to show 41,000 fewer jobs created. According to Reuters, much of the original inflation was seen in the auto industry, which kept plants open for operation when they would typically close for retooling.
Manufacturing payrolls declined 15,000, the first downturn since September 2011.
Government payrolls went down 7,000, which stretching the decline in that sector for six straight months
Temporary hiring declined 4,900 for the first time since March.
The participation rate of employment declined to the lowest percentage in 21 years. At 63.5%, that hasn’t been seen since September of 1981.
Average hourly earnings declined one cent last month.
Job growth has declined: In 2011, the average monthly gain was 153,000. In 2012, the average monthly gain has only been 139,000 per month.
I don’t know about you, but this doesn’t seem to fit Obama’s plan to move FORWARD.
crossposted at redstate
by | ARTICLES, ECONOMY, OBAMA, POLITICS
Obama’s speech didn’t sound like an incumbent President. It sounded like defensive one.
On Romney/Ryan: They want your vote, but they don’t want you to know their plan.…but Obama didn’t give us a plan, only class warfare and hope. The only “plan” he has is to hopefully tax the wealthy.
The stinging class warfare quote stuck with me because it was so contradictory:
My grandparents were given the chance to go to college, buy their own — their — their own home, and fulfill
the basic bargain at the heart of America’s story: the promise that hard work will pay off; that responsibility will be
rewarded; that everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same rules
The promise that hard work will pay off….for the government, who want to tax you more for your success (Buffett Rule, millionaire surtaxes, etc)
That responsibility will be rewarded…and so will irreponsibility (Sandra “pay for my contraception Fluke”, anyone?)
And the gem: “that everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same rules ….especially those darned wealthy who need to “pay their fair share”, to cover the 47% who didn’t pay taxes at all last year.
More on that theme:
I want to reform the tax code so that it’s simple, fair, and asks the wealthiest households to pay higher taxes on
incomes over $250,000, the same rate we had when Bill Clinton was president; the same rate we had when our economy created
nearly 23 million new jobs, the biggest surplus in history, and a whole lot of millionaires to boot
…so we can tax them more!
Daniel Horowitz had an excellent analysis of the problem of the idea of fairness and taxes. I highly recommend it.
What else is there to say?
“I” was mentioned 72 times.
“HOPE” was mentioned 17 times
“Tax” was mentioned 12 times
“Fair” was mentioned 7 times
“Economy” was mentioned 6 times
“Constitution” was mentioned 0 times
“You elected me to tell you the truth“….no, we elected you to uphold the Constitution and lead the country back on a path to prosperity. You have not done so, and that is the truth.
