Romney The Beautiful

O beautiful for heroes proved 
In liberating strife. 
Who more than self their country loved
And mercy more than life! 
America! America! 
May God thy gold refine 
Till all success be nobleness 
And every gain divine!

—America the Beautiful

o matter what date Mitt Romney actually left Bain Capital, there are two questions that he should be forced to answer:

1. Do you now approve of the deals that Bain made regarding outsourcing between February of 1999 and 2002? 

2. If Americans were allowed a more extensive look at  your tax returns, would they learn that you paid little or no taxes on your income some years?

You can see that any answer to the first question poses even more problems for Romney. If he says he doesn’t approve of what Bain did, the follow-up question would be:

But you were variously listed in filings with the SEC during that time as Chief Executive Officer, president, managing director, sole director, and sole shareholder. Additionally, you have profited from Bain holdings, including holdings involving outsourcing.  Do you regret doing so?

A “yes” answer to that follow-up, or if Romney says he does approve of what Bain did during the period between 1999 and 2002, would generate a final question:

3. What do you plan on doing with your free time after November 6?

As for question two above regarding Romney’s tax returns, if he said his returns would not show that he paid little or no taxes some years, he would then be asked to show them to us to prove his claim. If he said they would show that some years he did pay little or no taxes, see question 3.

Finally, Missouri isn’t considered a battleground state this cycle (so far), so we don’t get to see all that many political ads involving Romney and Obama and we’re missing a lot of the fun surrounding Bain Capital. But here is one of the finest campaign ads I have seen in ages:

11 Comments

  1. That is a great ad.
    Ya know, I heard something to the effect that if both candidates keep raising money at their present rates, TV might actually run out of commercial time!

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    • Clever broadcasters and capitalists won’t let the fact that there are only 24 hours in a day stand in the way of unheard of profits!

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  2. No doubt about it, a very effective attack ad. The notions of offshore banking accounts and exploiting cheap overseas labor are, well, unpatriotic. But, we do have a global economy and a look at Wikipedia on the subject of corporate tax ( http://en.wikipedia.org/wiki/Corporate_tax ) does show considerable variance. The GOP seems to have a point when they say the problem’s in the US tax structure. Our federal corporate tax starts at 15% for the first $50,000 of profits and quickly rises to about 35% above that. It is among the highest. Is it realistic to expect corporations to subordinate profit to patriotism? I don’t think so, and the facts bear that out. As a chart on the Wiki page shows, corporate tax as a share of GDP has declined in the U.S. from 5% in 1946 to only 1% today. I’m assuming that’s because the corporations have left town, taking the jobs with them.

    American workers can only compete with cheap third-world country labor by increased productivity, and I believe that’s actually happening, albeit that productivity often involves automation replacing people. ABC News has an ongoing segment on stuff “made in America” that supports that, and in response to the Olympics Uniform dust-up the journalists found several U.S. companies who could have done that job. Would they have been price-competitive? I don’t think so, or they would have said so. And here’s an important point about it: it’s not just the athletes at issue for these uniforms. Apparently Ralph Loren’s market for them is worth billions – that’s Billions, with a B, so lot’s of people apparently want to look like the athletes. (Who knew?)

    Look, sending jobs overseas and having offshore tax-evading bank accounts, it all stinks, but patriotism isn’t going to change human behavior or the dynamics of capitalism. The numbers prove it. What’s the answer? I’m thinking that the corporate tax rates do need adjustment downward.

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    • Jim,

      I have seen the ABC News segments on Made in America. They are fantastic and very revealing. The one on the uniforms made me realize there are places around that still make clothing. That’s easy to forget since it is very hard to find them in the stores around here.

      As for patriotism and profits, it isn’t too much to ask for American corporations, or those doing their primary business here, to sacrifice some for the good of the country that supports them. We ask much more of those who fight our wars and work in our intelligence agencies and so on. I don’t understand why it is okay to ask someone to get shot at it for the good of us all but not okay to ask someone–people are corporations remember–to contribute a little more in taxes. Instead, these folks employ an army of accountants to wage combat against their tax liability.

      Is the corporate tax rate too high? I think that question is becoming increasingly irrelevant, for the reason you point out. As a share of our economy, the revenue is quite small, which forces us to conclude that despite the relatively high corporate tax rate, few of the largest corporations are paying it because of various loopholes and dodges available to companies large enough to employ that army of accountants.

      As for the olympic uniform nonsense, the whole thing is just a snapshot of the larger landscape around us involving outsourcing American jobs while the corporations that benefit from doing business here refuse to invest in our well-being. I get sick whenever I think of all that money sitting offshore because these bastards refuse to bring it home and pay the tax on it. And as far as Romney and his vacationing money, if the American people put him in charge of the government, then it will indicate that slightly more than half the country don’t have a problem with a rich man refusing to honor his country enough to not hide his money elsewhere. It will be unprecedented, I am guessing. I don’t know how a President Romney could ask a soldier to risk his ass, if he wasn’t willing to put all his assets in America.

      Duane

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  3. Bbob

     /  July 16, 2012

    I have read that, yes, the corporate tax rate is 35 percent, but no one pays nearly that much because of the numerous loopholes. Anyone know of that is true?

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    • Some corporations do pay the higher rate, as I recall. Not all are large enough to afford the many accountants it would take to tell them how to avoid paying what they owe. But besides that, there is a school of thought that says corporations don’t pay taxes anyway, but merely pass much of that burden on to their workers through lower wages and benefits.

      Assuming that is true (and if Romney and Republicans get the government next year that assumption will become the law of the land), I would not be in favor of any cut in the corporate rate with the assumption that it would “pay for itself,” as some on the right claim. It would have to be offset with higher individual rates, particularly on the wealthy, and possibly an increase in, say, the gas tax (I know, that sounds ridiculous right now, but it would have several benefits). We can’t continue to have a decent civilization unless we are willing to pay for it.

      Duane

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      • You know, Duane, I had forgotten that corporations were people for a moment. Thanks for reminding me! 😆 In that sense, it would make sense to ask for some patriotic leeway.
        Unfortunately, I think we both know that isn’t going to happen. It’s just not the nature of “bidness”.

        I wish you wouldn’t dismiss so readily the possible beneficial effects of lowering the corporate tax rate, along with closing these loopholes (are those real?), because 1% of GDP is closing in on 0%. Do the math. Lowering it might not only bring in more money, but more importantly, bring back jobs. Somebody ought to do a study.

        You aren’t the first to think of raising the gas tax – I was roundly jeered for that a year or two ago.

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        • Jim,

          I remember very well those jeers about the gas tax. I probably wouldn’t raise it as much as you would, without some kind of way to protect the working poor, who outside of big cities have to drive to work.

          Anyway, I want to clarify a few things on my thinking regarding the corporate tax rates:

          First, large corporations do not pay the 35% nominal rate, as you know. Their effective or real rate is more like 13% on average because of the loopholes (like tax credits and shelters and other legal deductions courtesy of the tax code) you mention. Thus, for those corporations, it is largely irrelevant what the nominal rate is and there just isn’t that much incentive to base business decisions on lower nominal tax rates. (Remember that corporations paid much higher effective rates in, say, the 1960s, but still invested in American jobs. Corporate tax revenue as a % of GDP hovered near 4% throughout most of the 60s; today it is about 1.5%, which is one of the lowest rates in the world.) Therefore, in my opinion the expected boost to our economy–jobs, etc.–of a reduction in overall corporate rates would be negligible, and I fail to see the importance of it in itself. An average effective corporate rate of 13% is pretty damn low if you ask me.

          Second, I would suggest lowering the corporate tax rate for some small businesses, in some cases
          (like alternative energy start-ups; we have to be smart with the tax code, not consistent) to zero. Small businesses cannot exploit the complicated tax code the way larger ones can, and as you know most of the job growth here is in the small business sector. Thus, I assume (though have not looked into it) that the higher rates in place now may have some important effects on their growth, especially companies involved in newer industries (older industries, like the oil business or junk food business, are subsidized through the tax code and that needs to change). This is the part of lowering corporate rates that I could get behind enthusiastically.

          Third, we need to get revenues to run the government from somewhere. I could stomach the argument for lower nominal corporate tax rates if the effective rate was raised by closing the loopholes, resulting in an increase in total revenues, a position you seem to hold. Heck, I could stomach the argument for no corporate taxes at all, as long as the lost revenue is made up without taking it from the poor and middle class. In short, theoretically I don’t care where the revenue to run the government comes from, as long as it is raised based on fairness: those who economically benefit the most in American society should pay a much greater share of the burden. The problem is that one political party is entrenched in the madness of that ridiculous tax pledge and nothing important can get done at the moment. (That being said, I believe if Obama is re-elected with or without a completely Republican Congress, we will see something very much like the Simpson-Bowles plan for the budget. Remember, you heard it here first!)

          Duane

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          • Duane,

            I agree with your general summary of the situation. But, getting a system that provides funds to run the government fairly is what the problem is all about. I can’t get it out of my head that 1.5% of GDP is a symptom of manufacturing gone overseas. I still say, and I gather you might agree, lower the corporate tax rate to be competitive with other countries and close the loopholes. Hell, the whole tax code needs reform. I know you agree with that too. – Jim

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  4. ansonburlingame

     /  July 16, 2012

    Well Bbob, I recall that GE made millions, many millions and paid zero corporate income taxes a few years ago. But Welch is not running for President as well.

    I also agree with Jim. The problem is in the tax codes and not the men and women that legally comply with such tax codes, from either side of the aisle.

    But agree with Duane, hardly ever. See my response to the below blog.

    Democrats want to make the issue of off shore accounts or shipping jobs in a given company as immoral and with the implication that something in fact MIGHT be illegal in doing so. Baloney. Smart people do things within the law to make money and preserve their personal and corporrate wealth.

    If you don’t like them doing so, change the laws, democratically. Just like if you don’t want to deport some people, then change the laws, democratically.

    What are they suppose to do with that wealth, give it away??? Yep, that is what Duane would call for until someone started snopping around union pernsion funds, etc. Then he would scream “witch hunting” for politcal purposes.

    However, if you do not like rich people for any reason, then obviously don’t vote for either man. Obama made over $5 million a year or so ago on “other things” filed in his tax returns.

    Hell, let’s vote for Biden for President as we all know he has no money, personally!!

    I suspect some readers of this blog have money in a pension fund of some sort or maybe even some dividend paying stocks. Whether you look at how such stocks or funds make money on those investments, I have no idea.

    but if you do look and expect a dividend of say $3 per share from a given stock paid to you periodically, would you give it back if that profit (dividend) was gained by shipping jobs oversea? Maybe you would be dumb enough to do so UNTIL your retirement check went down by a considerable amount as a result of not sending jobs overseas.

    Moral to that story I suppose is don’t own any stocks or pensions funds or have a stake in their financial performance and how that performance affects your daily life. Again like it or not, the performance of those “markets”, the growth in those markets has astounding and far reaching effects on every American, on food stamps and Medicaid or not.

    Anson

    PS: A straight anwer to Duane’s questions is:

    1. It would depend upon the financial outcome to the company if the jobs were not shipped overseas. Because I was not involved in those decsions I cannot anwer your question with a straight yes or no answer.

    2. My returns relfect that I paid ALL the taxes required by law, and no a penny more, in any year that I filed a return. They will also show giving to my church alone at or above 10% of my earnings each year, outside of what I paid in income taxes.

    “unnumbered question”: I had no control over SEC filing issued by Bain Capital after February 1999 when I left Bain and began to rescue the Olympics.

    3. Live the rest of my life, comfortably and with the sense that I have lived my life honestly, honorably and successfully and gave it my best shot to help return the country to “better times”. For sure after Nov 6, 2012 I will gracefully and completely accept the vote of the American people.

    And to respond to your unasked question, “do I regret earning money from my long term investments in Bain Capital?” the answer is not at all any more than I regret making money on any other sound investments in legal enterprises in other areas of my portfolio.

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  5. ansonburlingame

     /  July 16, 2012

    OK, looking at the above supportive comments.

    Raise taxes on corportaiotns and at the same time “fix” the tax codes to not allow them to send jobs overseas. Go ahead.

    As well “fix” the way we tax “off shore accounts” and make those “slimy bastards” pay for ever nickel maded off shore. Go ahead and do so and see what happens to the American economy.

    It is like saying pay all workers in America $X dollars per hour as demanded by unions and change the laws to prevent sending those jobs offshore.

    In essence, remove the offshore pressure on our economy and make Americans pay for what Americans produce to sustain what Duane wants to achieve.

    Go ahead and try that along with paying for universal health care, etc. and see what your taxes might become.

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