Posts filed under “Current Affairs”

5 Theories Why Romney Won’t Release His Tax Records

Invictus here.

Mitt Romney didn’t have a very good week. When the Romney Campaign releases his 2011 taxes as a subject-changer, it’s a safe bet that things haven’t been going swimmingly.

Let’s oblige them by wading into this tax story.

Here is what we know: GOP candidate Mitt Romney has released his two most recent tax returns. According to Politifact, that’s far fewer than most presidential candidates disclose. As an example, Romney’s father, George, had released 12 years of tax returns. He has steadfastly refused to release the rest, despite being goaded by many players — not just Democrats and media pundits, but by members of the GOP establishment as well. Regardless, he has not been very forthcoming.

Why has he refused? There are no good answers, only speculations. Given that not releasing additional tax docs has cost Romney politically only increases the arm chair hypothesizing. All summer, the incumbent has battered the challenger on this (and related issues). Romney’s approval ratings have been hurt. His refusal is helping to coalesce a detrimental media narrative: There are different rules for people of privilege than for the rest of the country, and Romney has taken advantage of them. These week’s 47% gaffe only plays into that same narrative.

While the Obama ads have been politically effective, it’s been even more surprising that there has not been a successful counter from the GOP candidate. Romney was even vetted as a Veep candidate in 2008 by the McCain camp, where they ostensibly saw his tax records. McCain himself said Romney provided 20 years of records, and has paid his taxes . . . but then again, he passed over Romney for Sarah Palin as Veep.

The Obama campaign has offered to drop the issue if Romney releases just 5 years of tax docs. Still, the Romney camp has refused.

All of these minor sleights and unanswered accusations have led to a cottage industry of imagining what secrets might be hidden in these tax records. We do not know, but we can use some deductive reasoning to come up with some reasonable theories as to why Romney won’t share with voters what he showed the McCain camp (or perhaps, what took place post-McCain).

Here are our 5 top contenders:

1) 0% Tax Rates: The released tax documents show a very low tax rate, and Romney has said he never paid less than a 13% rate over the past 10 years. However, its not inconceivable that through a combination of aggressive tax planning, use of Trusts, earned income carry forwards and use of tax havens like Switzerland, Lichtenstein, Cayman Islands and Bermuda, Romney may have paid no taxes whatsoever in 2009 and years prior. His advisors may have correctly surmised this would be fatal to his Presidential aspirations.

Since I began composing this post, the Romney campaign has released a letter from his accountants to the effect that, over the period reviewed, the Romneys’ lowest tax rate was 13.66 percent (though there was a bit of numerical gymnastics to make that true in 2011). Note that Romney’s letter from PricewaterhouseCoopers discusses “adjusted gross income” — not total income; this subtle difference has already been debunked.

Not surprisingly in the post-Enron, post-WorldCom world, the word of an accountant ain’t worth the pixels used to write it. And, if it’s true, why not just get them out there and be done with with?

Well, maybe it’s:

2) Voter FraudThe Guardian and others came up with an even simpler theory: That Romney has voted in a state in which he was not technically a resident (i.e. voting in Massachusetts when he was actually a resident of California).

I first saw this in Forbes, which mentioned that “Romney appears to have escaped relatively unsinged from the apparently unrelated revelation that he may have committed voter fraud in January 2010, when – despite not owning a house in Massachusetts and having given every appearance of having moved to California…”

3) Broken Tax Laws: Personally, I assign this a very low to moderate probability. However, without releasing his returns, Romney leaves himself open to speculation that he may perhaps have crossed a line and submitted returns that are somehow numerically fraudulent and/or otherwise illegal (separate and apart from the aforementioned address issue).

BR has raised the issue of Romney’s IRA. William Cohan at Bloomberg has also wondered how he was able to legally amass $102 million in his individual retirement account — tax free! — during the 15 years he was at Bain Capital, despite contribution limits that would seem to make that all but impossible. What sort of rate of return is that, anyway?

Regarding the IRA contributions, Victor Fleischer, Professor of Law at University of Colorado is rather blunt: “Bottom line: Mitt Romney has not paid all the taxes required under law.”

Beyond that, it’s possible he is:

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Category: Current Affairs, Politics, Taxes and Policy

Open Mouth, Insert Foot: Going Viral?

I had barely finished reading Niall Ferguson’s takedown of President Obama when a flood of  takedowns of Mr. Ferguson started hitting the web. This post, then, will not be about his Newsweek piece, but instead about his recent Bloomberg TV interview with Erik Schatzker and Sara Eisen. And, in particular, one very specific part of that interview where…Read More

Category: Current Affairs, Data Analysis, Economy, Employment, Politics, Really, really bad calls

Of Magic Asterisks

Invictus here to talk a little politics and fiscal economics (which is to say there’s politics in this post and if you’re not here for an occasional dose of politics, skip this post): On October 3, 2008, Paul Ryan took to the floor of the House to speak in favor of the EMERGENCY ECONOMIC STABILIZATION…Read More

Category: Current Affairs, Economy, Politics

US Gun Homicide & Cost Data

Morbid (but interesting) discussion on the way home this evening about gun related deaths in the US. Here is the data I dug up: The United States has the highest rate of gun related injuries (not deaths per capita) among developed countries. In terms of their Firearm homicide rate (per 100,000 pop), only 8 nations…Read More

Category: Current Affairs, Data Analysis

The Fourth By The Numbers

As you prepare to consume a fifth (or more) on the Fourth, some factoids from the good folks at the Census Bureau. A happy Fourth of July to all. @TBPInvictus The Fourth of July 2012 On this day in 1776, the Declaration of Independence was approved by the Continental Congress, setting the 13 colonies on…Read More

Category: Current Affairs

Austerity At Work

Covering the waterfront of some recent economic and political matters, herewith some thoughts as you prepare to enjoy your summer’s first Bloody Mary: I’ve still not seen a supply side response to this wonderful piece by Mark Dow. If anyone has, please drop a link in comments. President Obama was excoriated recently for his clearly…Read More

Category: Current Affairs, Data Analysis, Economy, Employment, Federal Reserve, Politics

If Information Is Power, What Is Lack Of Information?

I’m going to take the charitable (though probably mistaken) view and say that Representative Daniel Webster was not deliberately trying to turn out the lights on Americans’ access to critical data when he proposed an amendment to defund the Census Bureau’s American Community Survey (ACS). I tried (unsuccessfully) last year (here, here) to salvage the…Read More

Category: Current Affairs, Data Analysis, Markets, Politics

Hey, Big Spender

I’ve written about this before, but since Paul Krugman just posted about it, perhaps it’s time to revisit the issue. Professor Krugman’s chart, in my opinion, doesn’t go far enough in that it does not provide sufficient context. While the chart does show the YoY percent decline in Real Government Expenditures & Investment, it does…Read More

Category: Current Affairs, Data Analysis, Economy, Markets, Politics

Merrill’s Heroes

Invictus here. BR’s comments yesterday, plus some unfortunate softball media coverage, led me to today’s rant. There are few things in the world that annoy me more than revisionist history, especially when it’s done to burnish one’s own damaged legacy. To make a George Bush/Osama bin Laden analogy,  I don’t think that much about Merrill…Read More

Category: Corporate Management, Current Affairs, Really, really bad calls

A Quick (and Belated) Look at Flow of Funds

Though the data are always a bit dated, the Fed’s Flow of Funds report is always of interest to me, as it paints fairly comprehensive pictures.  My favorite part of the release is Table B.100: Balance Sheet of Households and Nonprofit Organizations, in which much can be gleaned about the health of households in the…Read More

Category: Credit, Current Affairs, Data Analysis, Economy, Research