Tag Archives: Mitt Romney

Taxation ontology

Many have heard by now of Mitt Romney's relatively low (well, very low) tax rate: 13.9 percent on one accounting, 15 percent on another.  This is because his income does not come from work, but rather from dividends and other investments.  These are taxed at a different rate from work. 

I am going to grant that there are arguments for taxing investments differently from work.  Some of these arguments might be good ones, or at least strong ones.  The one Romney offered in is own defense, however, is not one of them. 

Here it goes (via TPM):

Romney’s argument is that even though he pays only 13.9%, he’s really paying something like 45% to 50% because the investment income he lives on comes from corporations. And those corporates also pay taxes. The nominal corporate tax rate is 35%, though of course many pay much lower. But if you add Romney’s rate together with this completely unrelated corporate tax he doesn’t pay, you get 50%, which Romney is now saying is real tax rate. In other words, he’s claiming he pays both taxes.

See the video at the link.  I'm trying to figure out the ontology of this claim.  It seems like Romney is saying that taxation runs with the money, as it were.  So if a corporation (which is, after all, people for Romney) makes profits, those profits are taxed.  That taxation counts for all of the money that then gets paid out in whatever way by that corporation (including the rise in the value of the stock price, etc.).  If the corporation puts the money back into the business, and then later sells the business, the money has already been taxed!  If a corporation pays me to do work for it, then I can claim the money they pay me has already been taxed!  If I buy a product in a store, I can claim that sales tax has already been paid in huge amounts!

I think this only works if corporations are literally people. 

Also, in the video, Romeny included his charitable contributions in his tax burden.  Taxes and charity are significantly different, however.  Taxes are obligations to your fellow citizens.  Charity is up to you.  I don't think he wants us to start thinking of the Mormon Church as a tax-supported entity. 

Brace yourselves

Many have probably heard Mitt Romney's line about firing people.  Here it is in full (ish):

ROMNEY: I want people to be able to own insurance if they wish to, and to buy it for themselves and perhaps keep it for the rest of their life and to choose among different policies offered from companies across the nation. I want individuals to have their own insurance. That means the insurance company will have an incentive to keep people healthy. It also means if you don’t like what they do, you can fire them. I like being able to fire people who provide services to me. If someone doesn’t give me the good service I need, I’m going to go get somebody else to provide that service to me.


This has some people jumping with glee.  It has others justifying (unfortunately) the context-free narrative-reinforcing interpretation, and maligning those who don't want to join in:

How did so much of the left descend into this kind of dickless navel-gazing? Because you know this is pretty typical of the tote-bag crowd. I’m glad Mike Royko isn’t alive to see all of this.

This was the response to someone's cautioning that Romney didn't mean he liked firing people while at Bain, when even by his own account he caused a lot of people to lose their jobs.

I'm (obviously) not a fan of Romney.  But I don't see any value in taking his claim out of context.  It lets him claim, truthfully this time, that his critics cannot be trusted.  Now someone might claim, plausibly, that he will say that anyway.  Nonetheless, it's still false.

Besides, there is a stronger criticism in its truthful interpretation.  Romney likes, as he claims, "being able to fire people."  That's a little bit like saying "I like being able to kill people in war."  It's a power people have, and you might think it's good that you have it, but it's not one you ought to "like" having.

Corporations are people

No, Mitt Romney, they're not really.  They're completely unlike people in almost every way.  They may, however, involve people, real people, at some stage in the process.  But this doesn't mean the corporation simply is the people who work there.  That would be, er, communism or socialism.  In a recent add, Romney says:

At just over the halfway mark, Romney declares: "Businesses are comprised of people. I'm talking about repair shops, and gas stations, and beauty salons, and restaurants. I'm talking about Apple computer, and Facebook, and Microsoft. I'm talking about businesses that employ people. It's really astonishing to me that the Obama folks would try and argue that businesses aren't people. What do they think they are? Little men from Mars? But when they tax business, they tax people."

Well, this is different from "corporations are people."  But it's still equally wrong.  It's wrong now because repair shops and gas stations really don't belong in the same category as Microsoft, etc..  More to the point, the problem with this new formulation is positively Clintonian–it depends on what the meaning of "is" is.  Corporations involve people; sometimes lots of people, transnationally.  But they are certainly not identical with them in the narrow sense of identity Romney seems to suggest.  Anyway. 

On this same point, here is an epic Iron Man (by a liberal commentator, of course–it's a disease they have) of Romney's argument:

Matthew Zeitlin has a nice New Republic post on the Romney “corporations are people” clip and the very real “hack gap” between Democratic and Republican parties.

The title of my own comment on this imbroglio, Separating the wheat from the gaffe, telegraphs my view. What Romney said is obviously true, and everyone who thinks seriously about economic policy understands it. Taxes on corporations fall on the owners of corporations and on other stakeholders. On the specifics, this particular attack on Romney is devoid of substance.

So the taxes fall on their "owners" (who sometimes aren't even actual people), but this doesn't mean corporations are people too.  It means, at some level, they involve people.  No one denies that.  They object to the way they involve those people.

But you are the man

Not long ago there was that commercial for cell phones which featured a powerful CEO type (in a corner office) claiming to an underling that his new cell phone plan was his way of "sticking it to the man."  The underling responded, but "you are the man."  One couldn't help but be reminded of that during the Republican convention.  In the department of things that had to be said (which is not a department here), Paul Krugman writes:

Can the super-rich former governor of Massachusetts — the son of a Fortune 500 C.E.O. who made a vast fortune in the leveraged-buyout business — really keep a straight face while denouncing “Eastern elites”?

Can the former mayor of New York City, a man who, as USA Today put it, “marched in gay pride parades, dressed up in drag and lived temporarily with a gay couple and their Shih Tzu” — that was between his second and third marriages — really get away with saying that Barack Obama doesn’t think small towns are sufficiently “cosmopolitan”?

Can the vice-presidential candidate of a party that has controlled the White House, Congress or both for 26 of the past 28 years, a party that, Borg-like, assimilated much of the D.C. lobbying industry into itself — until Congress changed hands, high-paying lobbying jobs were reserved for loyal Republicans — really portray herself as running against the “Washington elite”?

Yes, they can.

This is not some kind of ad hominem, as someone might think.  Romney's vast wealth-and his Harvard education and Eastern upbringing–make nonsense of the charge of "Eastern elitism."  Elitism would disqualify Romney (and Bush and especially McCain) well before it would Obama.  But Romney's charge, its falsity aside, is an ad hominem: rather than address the impact of Obama's policy proposals on regular non-arugula eating folk, Romney and his ilk have made a concerted effort to talk about the distracting and meaningless effemera of personality.