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August 23, 2012

Romney lies about tithing
Posted by Teresa at 09:05 PM *

The latest of Mitt Romney’s many excuses for not releasing more of his tax returns, aside from the two years he’s released to date:

Mitt Romney told Parade Magazine that part of the reason he does not want to release more of this tax returns is that he believes his tithing to the Mormon Church is a private matter, the Salt Lake Tribune reports.

“Our church doesn’t publish how much people have given,” Romney is reportedly quoted as saying in the forthcoming edition of Parade. “This is done entirely privately. One of the downsides of releasing one’s financial information is that this is now all public, but we had never intended our contributions to be known. It’s a very personal thing between ourselves and our commitment to our God and to our church.”

Be astonished: he’s lying again. Financial data about Mormon tithing is not a secret. Like members of every other denomination that tithes, Mormons list their tithing as a religious/charitable contribution on their tax returns, school financial aid forms, mortgage applications, and other documents where you itemize your income and what you do with it.

Want to see?

eHow: How to Write Off Tithes on a Tax Return. An article for members of all tithing denominations.

eHow: How to Look Up How Much LDS Tithing I Paid.

Instructions:
1. Call your bishopric and ask the ward executive secretary for a copy of your tithing statement. He should have the dates you paid and the exact amount, along with your yearly total, on file. Pick up a copy at your meetinghouse or ask the ward secretary to mail it to you.
(That brings back memories. Our ward clerk used to issue everyone a little annual statement of their total tithing and other donations for the year just ended. I got my first one when I was eight. I figured out what they were for when I started filing tax returns.)

Tithing and Tax Deduction: a query and three replies at askamormon.com, a very orthodox site. The question is from a churchmember who (the respondents agree) is being overscrupulous about declaring his tithing on his tax return—i.e., he hasn’t been taking a deduction for it.

Two threads, How does tithing work with taxes and Is tithing tax deductible, from the also very orthodox LDS.net Forums.

So you’ve glanced at those links. Notice how there’s not a lot of anxiety or implied secrecy there about declaring your tithing on your tax return? That’s because it’s not an issue and never has been. Romney made that up. People’s tax returns are their own business unless they run for president, but the amount a Mormon pays in tithing isn’t a bigger secret than the other info in his or her return.

The aspect of tithing that is personal and private is how you arrived at the figure you paid. The commandment in question says tithing is 10% of your increase. Whether that’s calculated on gross or net, total income or income after taxes, is between you and God. Romney has relocated the secrecy that properly applies to a transaction between him and God, to the deductions he took for tithing on his tax return, which is between him and Caesar.

This man will lie about anything and he is bad at it. He is a stupid, stupid liar.

But let’s go back to the business of Mormons and tithing. The “let your conscience be your guide” approach to calculating tithing works out pretty well for God, since Mormons overall tend not to nickle-and-dime Him. If it’s income, they pay tithing on it. That means they tithe on payouts from retirement accounts, even though they tithed on the money they invested in it. If their Mormon parents gift them $100 out of the parents’ already-tithed funds, the recipient tithes $10 in turn.

Some of you will have already spotted the kicker: Mormon tithing practices don’t recognize clever loopholes and offshore schemes for hiding income. If it’s increase, you tithe. Romney’s religious excuse for not wanting to reveal his tithing is hogwash, but I can think of a more worldly reason he might flinch at it: if his declared income is out of synch with the amount of tithing he paid.

That could get interesting. It could also go either way. I assume Romney pays proportionally less than a retired Mormon schoolteacher because he thinks in terms like whether that money has already had tithing paid on it, whereas the schoolteacher just sees her retirement income as income. That attitude could look bad to other Mormons. The other possibility is that his tithing in some years has significantly exceeded 10% of his acknowledged income, which would look bad to just about everyone.

=====

For a good summary of the presidential candidate tax-return thrashes of this and previous election years, try this CBS overview: Outrage over tax returns a replay of past campaigns. If you just want the current baseball scores. See below. “Ongoing” is because sitting presidents will have been releasing their tax returns annually.

Obama 2012: ongoing
M. Romney 2012: 2010 returns plus an estimate for 2011
Gingrich 2012: 1 year
Obama 2008: 7 years
H. Clinton 2008: 7 years
McCain 2008: 2 years
G.W. Bush 2004: ongoing
Kerry 2004: 20 years: 5 years for presidential run, 15 from prior senate campaigns
Edwards 2004: 10 years
G.W. Bush 2000: 9 years
Gore 2000: 8 years
Dole 1996: 29 years
Forbes 1996: no returns released
B. Clinton 1996: ongoing
G. Bush 1992: ongoing
B. Clinton, 1992: 12 years
Perot 1992: no returns released
Dukakis 1988: 6 years
Reagan 1980: 1 year
Carter 1980: 8 years
George Romney 1968: 12 years

Feel free to suggest corrections. I haven’t yet found an online source that reliably differentiates total years of returns released while a candidate and returns released while holding high office. In the meantime, here’s the Tax History Project.

Comments on Romney lies about tithing:
#1 ::: Chris Quinones ::: (view all by) ::: August 23, 2012, 09:23 PM:

Has Harry Reid ever released any of his tax returns? He could do so now if he wanted to turn the screw on Mitt a bit further.

Of course George Romney has, as you note, so the issue didn't exist for him.

I think Mitt is more bullshitter than liar, in the Harry Frankfurt sense: He doesn't care about the truth of the matter, he just wants The Help (hat tip to Charlie Pierce) to shut up already.

A friend of mine also brought up the Stericycle issue. Being pro-choice, and not a part of that world/mindset, I don't know if Mitt could tap-dance past that showing up on his taxes.

I'm guessing tithing, and Stericycle, and some other shenanigans are all there, myself. Mitt seems the type to adopt tax accounting so aggressive Major League Baseball would suspend it for 50 games.

#2 ::: P J Evans ::: (view all by) ::: August 23, 2012, 10:17 PM:

I'm to the point where I figure Romney lies the way he breathes: constantly, automatically, and even when not doing so would be to his benefit.

I figure there must be stuff on his returns that he knows would get him in very hot legal water, and being elected President wouldn't prevent that trouble.

#3 ::: mjfgates ::: (view all by) ::: August 23, 2012, 11:22 PM:

Mitt lies like one of those Pakistani rugs made with enslaved child labor.

Mitt lies like a hound dog strapped under the porch for a six-hundred-mile car ride.

Mitt lies like the nation's economy, etherized upon a table.

....

#4 ::: Ericka ::: (view all by) ::: August 23, 2012, 11:53 PM:

Ah lovely. I've been trying to think of a way to get this issue/question out for consideration. Thanks!

#5 ::: An Infinitude of Tortoises ::: (view all by) ::: August 24, 2012, 12:12 AM:

Under the circumstances ("It's Romney's Voter Fraud, Stupid"), it's not surprising to see a bit of absurd flailing here.

#6 ::: Lee ::: (view all by) ::: August 24, 2012, 12:33 AM:

Romney’s religious excuse for not wanting to reveal his tithing is hogwash, but I can think of a more worldly reason he might flinch at it: if his declared income is out of synch with the amount of tithing he paid.

That was the first thing I thought of, well before I got to the above statement. It's not his tithing that he needs to hide, it's his income. He'd have been better off making up something about how, as a rich man, he feels a duty to tithe more than the religiously-required minimum. After all, that's giving it to the CHURCH voluntarily, which is just fine since it's not like having the GOVERNMENT taking it from you by FORCE. And that claim, unlike the one he made, would be very difficult to disprove.

And damn, you're right, he's a stupid liar. If I can think of (1) a better lie and (2) a way to keep it from being successfully* spun against him before I've even finished the main post, he's got serious problems in that area.


* As in, the spin not being credible to the main Republican base.

#7 ::: The Raven ::: (view all by) ::: August 24, 2012, 04:34 AM:

"This man will lie about anything and he is bad at it. He is a stupid, stupid liar."

And, kraw, somehow it doesn't seem to affect his electability because…because…because why, exactly?

#8 ::: Dave Bell ::: (view all by) ::: August 24, 2012, 04:51 AM:

Be careful...

Teresa, you write:

Be astonished: he’s lying again. Financial data about Mormon tithing is not a secret. Like members of every other denomination that tithes, Mormons list their tithing as a religious/charitable contribution on their tax returns, school financial aid forms, mortgage applications, and other documents where you itemize your income and what you do with it.

I could add a few other things to that list, such as bank statements. But you risk misdirection over the privacy angle. All these entities have a "need to know" the figures. It's part of their job. That doesn't mean they should publish them. Everyone's tax returns are private, unless they (or a court) choose differently.

What matters is that Mormons include their tithing on their tax return, and getting that deduction is normal. So maybe His Miltness needs to explain that, but I'm inclined the agree with your inference that this is an excuse to hide something less politically palatable.

Or, as I mistyped, less politically Palpatine.

We might have a culturally influenced difference on how we see privacy here. Sometimes the things American companies are allowed to do with data about customers looks frightening, compared to Europe. But you're giving examples of ordinary accounting practice, of people who have to know these details because they cannot do their job without knowing. And that's not information that they should be talking about.

If these source were fully public, we wouldn't have arguments about the release of tax returns. They would already be out there, for all of us.

And I am not sure what quick-soundbite word is better than "private". Maybe "personal"?

But if His Miltness doesn't want to publicise his personal details, he's been in the wrong business for a long time.

#9 ::: Jo Walton ::: (view all by) ::: August 24, 2012, 09:00 AM:

The other possibility is that his tithing in some years has significantly exceeded 10% of his acknowledged income, which would look bad to just about everyone.

Except God.

I bet that's what he has done. It goes with who he is. It's exactly how he behaves. He acts like somebody whose conscience is clear -- he may have shafted the little people and the state and lied and lied, he doesn't care at all, why should he? He knows he's right with God, to the penny.

#10 ::: Alan Braggins ::: (view all by) ::: August 24, 2012, 09:13 AM:

> The other possibility is that his tithing in some years has significantly exceeded 10% of his acknowledged income, which would look bad to just about everyone.

If his income is significantly more than his acknowledged income, that looks bad, but is "chose to tithe more than 10%" really not another possible explanation?

#11 ::: Jo Walton ::: (view all by) ::: August 24, 2012, 09:33 AM:

Dear Mormon God,

You're weird, but some ways cool. I like the planet bit.

You don't know me, and let's keep it that way. I just had a thought about how I'd fix this in one of my universes, and thought I'd make a suggestion. I hope that's OK.

So, Mitt Romney, grovels to you, condescending, bullying and lying to everyone else. He's really not a very good advertisment for the LDS church.

How about if you send a dream to some nice honest clerk who truly values Mormon Presidents but values honour more. The guy we want is somebody with access to Romney's tithes, and who could just release them to the world. Send him a dream to stress the tenth commandment -- you still have that, right? Bearing false witness? Let him know that breaking confidentiality in this case would be doing your work. The clerk would know already that Romney was lying...

Just what I'd do, maybe you can come up with something better,

#12 ::: Torrilin ::: (view all by) ::: August 24, 2012, 09:45 AM:

Catholics aren't required to tithe, but it's fashionable for someone who considers themselves rich to tithe, or give more than a tithe every year. (or rather, to *claim* that's what they do... since for the most part these are private figures, so they don't have an obligation to transparency)

This rhetoric is often accompanied by claims that the person in question was terribly poor before they tithed, and now look at them. Usually terribly poor means "can't afford Catholic schools" or "had to buy store brand canned soup". Yeah, I know, that's not poor to me either, or to most Catholics. It's an argument from emotion, not something logical at all.

#13 ::: Teresa Nielsen Hayden ::: (view all by) ::: August 24, 2012, 12:17 PM:

Dave Bell, you're right that those are all private documents. What I should have said is that tithing information isn't more private than the documents themselves.

Torrilin, I think that comes under Notkin's Law: "Most families are weird about sex, but all families are weird about money."

#14 ::: Lin Daniel ::: (view all by) ::: August 24, 2012, 05:04 PM:

I think An Infinitude of Tortoises @5 just may have something here. Money, and issues about it, can be fluffed, folded, massaged and mutilated until it's unrecognizable. But Romney committing voter fraud?

#15 ::: pedantic peasant ::: (view all by) ::: August 24, 2012, 10:05 PM:

Teresa:

As Dave Bell @ 8 says, I don't think he's saying he wanted it anonymous, but that outside of him, his church and the IRS it should be private.

I've also been wondering for a while, particularly given his pro-life record back in Mass, if the real dodge is something else that would hang him -- like either he or his wife making a charitable donation to Planned Parenthood in the past ten years.

And yeah, Romney is a horrible liar. If we were in a more sfnal universe, with AIs and androids, he'd be in trouble: They may've called Gore robotic, but listening to Romney talk, I have my doubts he could pass a Turing test.

Jo Walton: I belive false witness if the eighth commandment. Ten is coveting thy neighbors' goods.

#16 ::: P J Evans ::: (view all by) ::: August 24, 2012, 10:10 PM:

14
And tax fraud - some of the things he did with his overseas accounts are at best borderline illegal and should at least require him to file a very belated amended return. (Like turning management fees into unearned income.)

#17 ::: Nancy Lebovitz ::: (view all by) ::: August 24, 2012, 11:29 PM:

The ninth commandment is the one about bearing false witness.

#18 ::: Bill Higgins-- Beam Jockey ::: (view all by) ::: August 25, 2012, 12:14 AM:

I hope Pedantic Peasant is pedantic enough to be aware that there are multiple schemes for counting the Ten Commandments. A statement like "bearing false witness is the eighth commandment" needs to be qualified by a phrase like "to Lutherans and Catholics."

#19 ::: pedantic peasant ::: (view all by) ::: August 25, 2012, 12:32 AM:

Bill @ 18:

Thanks. Given the venue, and especially the source, I was wondering if such might be the case. I know the Our Father runs into those sorts of differences, I wasn't sure if the Commandments did too, which is why I tried to modify and mollify with the "I believe."

Nice to know. And many thanks for the link.

Apologies for my own ignorance.

#20 ::: An Infinitude of Tortoises ::: (view all by) ::: August 25, 2012, 01:26 AM:

Lin @14: I'd like to think Brad Friedman is onto something with that. Given the GOP's current obsession with stamping out voter fraud (most of which, it appears, they themselves commit -- meanwhile engaging in election fraud and voter disenfranchisement on a massive, unprecedented scale), it would be acutely embarrassing to say the least if Bob Forehead himself were revealed to be engaging in it. And since he seems perfectly comfortable in his role as an ignorant, misogynistic, homophobic, racist, offshoring, job-busting, money-laundering vulture corporatist, it would be great to have something to rub his nose in. Romney's greater offenses have the disadvantage of being "merely" immoral though essentially legal, whereas voter fraud is widely deemed criminal.

#21 ::: Deirdre Saoirse Moen ::: (view all by) ::: August 25, 2012, 01:29 AM:

Win/lose by party correlated with # of tax returns:

http://deirdre.net/wp-content/uploads/2012/08/presidential-tax-returns.0011.png

#22 ::: hamletta ::: (view all by) ::: August 25, 2012, 05:00 PM:

Occam's Razor scooter sez: Romney made some big-ass, deductible contributions to Planned Parenthood, or some other non-wingnut-worthy organization.

And yes, "bearing false witness" is indeed the eighth commandment. In Luther's Small Catechism, it includes thinking the best of people's intentions, which is also good mental hygiene.

If someone looks at you funny, it's best to assume that person had a bad piece of fish until prove otherwise.

#23 ::: Fragano Ledgister ::: (view all by) ::: August 25, 2012, 08:18 PM:

Teresa: You write "People’s tax returns are their own business unless they run for president", that should be "unless they run for public office". The presidency is only one of the offices for which the tax return is, or could be, a legitimate public concern.

#24 ::: 'As You Know' Bob ::: (view all by) ::: August 25, 2012, 08:34 PM:

Rmoney was talking about the tax return that he HAS released, and said something like: "I paid at a rate of at least 13% - - AND WHEN YOU ADD IN TITHING [which of course has little to do with his tax obligations], it must be at a rate over 20%."

So

a) the "20%" number was a either deliberate attempt at misdirection, OR it shows that he has a poor understanding of church/state distinctions;

and

b) this major-league Mormon just told us that he 'tithes' at a rate of 7%.

Which means that he doesn't meet his obligations to his church either.


#25 ::: Paul A. ::: (view all by) ::: August 26, 2012, 02:29 AM:

'As You Know' Bob @ #24:

It seems to me you are not giving sufficient weight to the words "at least" and "over". 10 added to 13 is 23, which is indeed over 20.

When there are so many real reasons to disapprove of Romney, it's neither necessary nor productive to invent new ones.

#26 ::: SamChevre ::: (view all by) ::: August 27, 2012, 09:21 AM:

Like members of every other denomination that tithes...

A quibble: there are some denominations that refuse on principle to keep track of giving to the church, or to claim such giving as a tax deduction. I grew up in such a denomination.

#27 ::: Howard Bannister ::: (view all by) ::: August 27, 2012, 11:45 AM:

@Sam: Non-institutional Church of Christ? (that's where I grew up....)

#28 ::: SamChevre ::: (view all by) ::: August 27, 2012, 01:09 PM:

Howard Bannerman @ 27

Similarly non-institutional, but much more visibly strange; conservative Amish-Mennonite. (Note that the policy varies from church to church within Amish and Mennonite churches.)

#29 ::: Howard Bannister ::: (view all by) ::: August 27, 2012, 01:32 PM:

Ah, yes. I almost put them in as an or, since I've known some individual congregations that were very much like my congregation-of-origin.

#30 ::: paul ::: (view all by) ::: August 27, 2012, 05:44 PM:

Ooh. Unrealized and tax-sheltered (as in IRA) capital gains. It is damn hard to to a few hundred thousand into a hundred million if every year you give 10% of your increase in value back to the church.

#31 ::: Fred Garven ::: (view all by) ::: August 28, 2012, 11:45 AM:

I wish there was a flat tax. Perhaps then leftists would stop whining and wondering about something so petty, and worry about things like 16 trillion dollars, and a current loss of another 1.3 trillion dollars a year. And, no, taxing the rich people isnt going to make that up, maybe in fantasyland but not in the real world. Or, if you want to try to keep it only somewhat hypocritical, what are the dfl paying in taxes, and how many of them are using their positions to scam money (i suppose i wont mention pelosi and her brother). How many people in the alternative energy were found to have connections with the companies that they gave funds too? 28? get off this who pays what. They are all crooked, i just want whatever one is the least likely to further the fascism in our government and poverty-stricken socialism that our society is becoming. is that obama? not if you actually look his stuff up.

#32 ::: Jeremy Leader ::: (view all by) ::: August 28, 2012, 01:51 PM:

Fred Graven @31: "leftists would stop whining and wondering about something so petty"

You raise important points, but remember, this isn't "whining and wondering" about some random mega-millionaire. This is about a man who wants to lead our country. He says he's uniquely qualified because of his business acumen and experience. We are trying to evaluate those claims, and are being frustrated by his unwillingness to honestly answer questions or provide evidence about his business practices and his ethics.

In other words, it's at least partly a question of character.

Also, I'm having trouble with the acronym "dfl". I assume 'd' is for Democrat, but what's the rest of it? Searching the web wasn't much help: "Democrats for Life"? "Democratic-Farmer-Labor party"?

#33 ::: Jim Macdonald ::: (view all by) ::: August 28, 2012, 03:08 PM:

I doubt "leftists" would stop "whining" if there were a flat tax: Flat taxes are terribly regressive and massively favor the ultra-rich.

#34 ::: Howard Bannister ::: (view all by) ::: August 28, 2012, 03:26 PM:

BTW, I crunched my tax numbers and Romney's tax numbers. Between the two of us, apparently we already have a flat tax.

Only he wants to cut his taxes and raise mine.

So, yeah.... that particular framing is just plain disingenuous. All the way.

#35 ::: abi ::: (view all by) ::: August 28, 2012, 03:43 PM:

Flat tax is to the "who pays for what" discussion what get the government out of the marriage business is to conversations about marriage equality: a way to avoid discussing practical solutions. A derail. A demonstration of privilege by people who are not at the sharp end of the problem, that they can take the conversation so far from reality.

My mother is a tax lawyer. I know what the likelihood of passing an applicable, loophole-free, enforceable flat tax would be—even if it were any kind of good idea. Whelks will surf supernovas first.

#36 ::: Howard Bannister ::: (view all by) ::: August 28, 2012, 03:46 PM:

I had to look up whelks, being ignorant. Having looking them up, I can say with great certainty that this is the perfect metaphor.

#37 ::: abi ::: (view all by) ::: August 28, 2012, 03:54 PM:

I stole it from Douglas Adams. Ford Prefect uses it as an analogy in Life, the Universe and Everything, and Arthur Dent completely fails to understand what he's talking about.

Also, having reread the original scene, Sudden Obsession with Whelks is the name of my next Culture ship.

#38 ::: Howard Bannister ::: (view all by) ::: August 28, 2012, 04:12 PM:

Ah. I imagine when I read that line I thought to myself, Arthur-Dent-style, surely he's describing some unimaginable phenomena that I cannot imagine, not actually trying to communicate in knowable metaphors.

But I was easily confused at fourteen.

(ah, if only I could say I was less easily confused at thirty.....)

#39 ::: 'As You Know' Bob ::: (view all by) ::: August 28, 2012, 04:13 PM:

The people who clamor for a flat tax usually go all quiet when you ask if we can start with Social Security withholding (which currently is drastically regressive).

#40 ::: 'As You Know' Bob ::: (view all by) ::: August 28, 2012, 04:19 PM:

But back to Paul A at #25:
It seems to me you are not giving sufficient weight to the words "at least" and "over".

Well, the reason I'm not giving any weight to the words "at least" and "over" is because they're weasel words. The guy has a high-powered Harvard Business School education: if his total percentage really WAS 23%, he would have claimed "23%". If his total outlays are being questioned, what's his motivation to round down?

When he says, "if you add in tithing {to the 13% I paid in taxes}, it's over 20%" I think he's saying exactly what the numbers let him get away with claiming.

He has not given the public any reason at all to trust him (or even to cut him any slack) on the question of his personal finances. This, after all, is the guy who in the primary debates, looked us in the eye and lied about his given name.

When he was given the opportunity to clearly say "I also gave 10% to my church" he did not do so.
Instead, he weaselled, and left us with the distinct impression that he doesn't actually meet the requirements of his religion.

Is it possible he's just being modest?
Yes, that's possible.

Does his behavior give one the impression that he's lying about his personal finances? Oh yes.

Is there a good reason to give him the benefit of the doubt here? I'm not seeing it.

#41 ::: abi ::: (view all by) ::: August 28, 2012, 05:32 PM:

I know that our derailing driveby is unlikely to be back, and I suspect that he is so deeply entrenched in his tribal identity as to be impervious to any contra-arguments. But, in the event that he mistakes a failure to address his comments for agreement with them, I'd like to take a moment to touch on a few points of interest.

First off, the best way to deal with the deficit is to improve the tax base. Get more people back into work, in jobs that pay enough that they're being taxed. So far, we're all in agreement.

But trickle-down bullshit hasn't worked to get them into those jobs. So enough with using the tax system to increase the balances of a bunch of accounts in the Cayman Islands. That money doesn't stimulate the economy. Instead, let's get it to the people who will spend it in their local businesses, buy consumer goods, and create the jobs that make and sell the things they will buy.

The tax revenues from making the rich pay their share won't fill the gap—but they're the seed money for broad-based economic stimulus. They're an investment. The returns from that investment are what reduces the deficit.

Secondly, I've lived in a country where pretty much every sane politician was a socialist. On the one hand, it wasn't such a bad place to live (well, apart from the climate, but you can't blame an economic system for that). On the other hand, the experience made me quite clear on the fact that Obama is nowhere in the neighborhood of socialism. Nor, by the way, is he a fascist or anything like that. Anyone who says either is simply exposing a staggering, faintly amusing ignorance.

As for me, I treat elections as job interviews. Candidates should demonstrate that they support the values of the organization they seek to join, including both transparency and public-spiritedness. Refusing to reveal his tax returns reveals the former; I suspect that the contents of the tax returns demonstrate the latter.

Candidates should also, by the way, have a can-do attitude. But one of the two political parties has built its entire message on the idea that government doesn't work. Their continued election is dependent on that message being correct. Surprisingly enough, when they're in charge of it, government tends not to work.

I've lived in countries where everyone seeking election believes that government is a useful tool. And I've noticed that in those places, it tends to work better than it does in the US (particularly when the no-can-do guys are at the tiller).

Funny, that.

#42 ::: Dave Bell ::: (view all by) ::: August 28, 2012, 06:15 PM:

abi@41

Not increasing the tax base is exactly the idiocy which is the result of the doctrinaire adhesion to "austerity" in European politics. Greece is notorious for tax evasion. We have all the fuss about cutting spending, and forcing people into unpaid work, here in the UK.

Anyway, taxing the rich is like robbing banks: that's where the money is.

#43 ::: albatross ::: (view all by) ::: August 28, 2012, 06:57 PM:

abi:

I'm not sure I'd want to give up discussing changes to current policies just because they seem very unlikely to pass. In 1990, I imagine I would have put gay marriage in that category, and today, ceasing our sociopathic foreign policy or building of the infrastructure for a police state here at home seem unrealistic.

For what it's worth, with far less expertise than you or your mom, I think a much simpler tax system where all income was treated the same and there were far fewer deductions and exemptions available would be preferable to what we have now. Ideally, that would include getting rid of the ceiling on income taxed for social security and medicare.

Very rich people will always be able to do some game playing to minimize their effective tax rate. But I think we'd be better off if there were less return on investments in clever tax dodges, and fewer smart people making a living playing complicated zero-sum games over who will pay how much to the IRS.

#44 ::: albatross ::: (view all by) ::: August 28, 2012, 07:01 PM:

abi:

One thing I find interesting is how little of campaign coverage fits the job interview model, or the related model of how you personally choose, say, a dentist or accountant or lawyer. I can't help suspecting that's largely because evaluating a candidate for a demanding job is work, and the TV news channels in particular are selling entertainment. For a lot of people, I rather suspect politics has more in common with cheering for their football team than with choosing someone to do a demanding job, or keeping tabs on someone who is supposed to be doing a demanding job on your behalf.

#45 ::: abi ::: (view all by) ::: August 28, 2012, 07:04 PM:

albatross @43:

I think there's juice in looking at ways to simplify the tax system in the ways you've described. I also think there'd be a huge fight about it, because many people who stand to lose x per annum if the law goes through will see the logic in investing 0.5x in lobbyists and lawyers to prevent its passage.

But that's different than what I was talking about: an applicable, loophole-free, enforceable flat tax. The penultimate word is the whelk-word.

#46 ::: Jeremy Leader ::: (view all by) ::: August 28, 2012, 07:26 PM:

Part of the problem with "flat tax" proposals lies in the definition of "flat". Obviously, a "flat" tax taxes all income equally (so far, so good!). What is income? Well... is it income if someone gives it to you as a gift? What exactly is the difference between a gift and a tip, and who decides? Is it income if you're a church, and your parishioners give it to you on Sunday? What about expenses? For businesses we currently tax "net" income, after deducting expenses. What's an expense? What about living expenses for individuals? What about money spent to pay other taxes (state taxes, sales taxes, property taxes, taxes to foreign governments)? Which of those should be taxed a second time, and which shouldn't?

It's kind of like saying "we shouldn't need all the inefficiencies of criminal laws, and courts, and police; we should just throw people in prison if they've done something bad".

Our tax code, like our criminal code, is too complicated, and unjust in many aspects. But that doesn't mean that it's possible to replace it with something really simple. Much of the complexity is intrinsic to the situation (and especially needed to deal with natural attempts to "game" any such system for individual advantage).

Or, to steal from Einstein, our tax code (like our legal code) should be as simple as possible, but no simpler.

#47 ::: Lee ::: (view all by) ::: August 28, 2012, 07:29 PM:

Not to mention that a flat tax is regressive in effect, no matter what its advocates claim. At low income levels, absolute numbers matter as much as percentages.

#48 ::: Avram ::: (view all by) ::: August 28, 2012, 07:38 PM:

The especially dishonest thing about flat-tax advocates is that they generally try to appeal to the rest of us by talking about how much simpler the tax system would be. I recall Steve Forbes, when he was running for the presidency back in '96, going on about how, with a flat tax, you'd be able to send your tax form in as a postcard.

What this overlooks is that the complexity of the tax code isn't located in the percentage of taxes you pay --- the IRS gives you a look-up table for that. The complexity is located in the steps you go through to figure out what your taxable income is. Rich people have lots of ways of manipulating that figure, and they're not going to give them up.

Look at a 2011 IRS 1040 form. (That'd be the one you filled out this year, for your 2011 income. You can download a PDF from the IRS's website.) Lines 1-43 are all devoted to figuring out your taxable income, and lines 47-72 are all about figuring out how much tax you've already paid, or if you need to pay more, or whether you qualify for tax credits. Some of those lines reference other forms, meaning you might have to go through over a hundred lines of arithmetic to figure out your taxable income. Once you've tallied it all up, though, that's just three lines to work out what your tax rate is: 44-46. A flat tax would change the instruction for line 44, and maybe get rid of 45 and 46; that's all. All that talk of simplicity is bullshit to cover up the fact that a flat tax would impoverish people at the lower end of the income spectrum, to the benefit of those at the high end.

#49 ::: DavidS ::: (view all by) ::: August 28, 2012, 07:56 PM:

A while ago I came up with the following classification of sources of tax complexity.

(1) Use of taxes to reward behavior the government likes. Examples: Child credit, healthcare spending accounts, mortgage interest deduction, student loan interest deduction, deduction for charitable donations, and tons of smaller examples. The small examples tend to be the things brought up as absurdities of the tax code in complaining articles. Taxes could be much simpler if we stopped using the tax code to reward these behaviors, but most of us want the government to guide people into pursuing education, raising children, etc and this is the tool we Americans have used for the last several decades.

(2) The difficulty of measuring income for people in certain occupations. How much of your mortgage is paying for the cost of your home office, how much of your car maintenance goes to your work travel, how should you count customers who haven't paid you yet? This seems unavoidably complicated; there is a reason accountants need years of training.

(3) Rules to that try to reduce the incentive to time one's income to minimize taxes. This is the one which a flat tax would reduce: If everyone has the same tax rate, and the same initial deduction, then there is no incentive to shift income from one year to another. (Note that this principal should logically lead to a very large negative income tax at the lowest income tiers, which most flat tax advocates don't support.) I suspect this is a very small part of tax complexity as experienced by most payers, because most of us have no ability to shift our income. But it might be a large part of complexity as measured by hours spent by tax attorneys because, whenever I read about the complicated tax schemes of the wealthy, there seems to be a lot of manipulation of this sort.

I'm curious how this breakdown sounds to the more knowledgeable.

#50 ::: albatross ::: (view all by) ::: August 28, 2012, 10:33 PM:

Just a couple nitpicks:

a. A real flat tax would be neither regressive nor progressive, pretty much by definition. Everyone pays the same rate. The problem several people are labeling as having a regressive effect is really just that it's moving from a progressive (higher rates on higher incomes) to a flat rate.

b. Every scheme I have ever seen proposed for a flat tax actually has two rates--a 0% rate below some income threshhold and a flat rate above it. So those are neither flat nor regressive.

The main argument for higher rates on higher incomes, as well as deductions for dependents, is to avoid taxing away anyone's eating money, or more broadly to try not to impose too much hardship on anyone while raising enough money.

#51 ::: albatross ::: (view all by) ::: August 28, 2012, 10:37 PM:

DavidS:

I think the thing where you deduct from your taxable income based on number of dependents is about not taxing away your eating money. That strikes me as quite different from mortgage interest deductions, health savings accounts, first time home buyer credits, etc.

#52 ::: Melissa Singer ::: (view all by) ::: August 28, 2012, 11:18 PM:

The problem, of course, is that some of us pay hefty local and state taxes in addition to federal . . . and that some of us, without the mortgage interest deduction, would never own homes (and I'm not talking about McMansions or people who were overextended even before the collapse, but about people like me, who make what should be a livable income but because of where we live, are barely scraping by).

#53 ::: The Raven ::: (view all by) ::: August 29, 2012, 12:25 AM:

(cross-posted from my blog.)

This is not just Romney in action. The Republicans seem to have decided to do nothing but lie until the election: over three months. We're going to be crazy and sick with disgust by the end of it.

Charles P. Pierce, on fire at the RNC:

It was an entire evening based on a demonstrable lie. It was an entire evening based on demonstrable lies told in service to the overriding demonstrable lie. And there was only one real story for actual journalists to tell at the end of it. // The Republicans simply don't care. // They don't care that they lie. They don't care that their lies are obvious. They don't care that their lies wouldn't fool an underpaid substitute Social Studies teacher in a public middle school, who would then probably go out one night and get yelled at by Chris Christie. ("They believe in teacher's unions. They believe in teachers," he said in his speech. Yeah, you just don't believe in paying them.) They don't care that their history is a lie and that, by spreading it, they devalue the actual history of the country, which is something that belongs to us.

They've pulled out all the stops. They think this election will be their victory, and there will be no-one to call them to account at the end of it.

And they may be right. They own a whole television network and have a huge staff of net propagandists to spread their lies. The "vote fraud" lies are widely believed. The "Obama has removed the work requirements for welfare" lies seem to be taking hold.

This must have been what the run-up to fascism was like in the 1930s, with the mass media pumping out lies and the media-induced madness setting a population against itself. Well…it isn't the 1930s. There is some hope. But what are we hoping for? A still-bad political situation which can be salvaged? Hell of a thing to have to hope for.

#54 ::: The Raven ::: (view all by) ::: August 29, 2012, 12:31 AM:

abi, #41: "I treat elections as job interviews."

You--we--are very much in the minority here: the largest plurality of voters make their decision based on group affinities. That's why there's so much emphasis on race from the Republicans: they want to drive people away from the party of Scary Brown People Not Like Them.

Lee, #47: "Not to mention that a flat tax is regressive in effect, no matter what its advocates claim."

The flat tax: where the rich man's yacht money and the poor man's shoe money can be taxed at the same rate.

I have a longer comment on lying Republican liars that has been gnomed; maybe you'll see it tomorrow. Meantime, essentially the same remarks may be read here.

#55 ::: Nancy Lebovitz ::: (view all by) ::: August 29, 2012, 12:41 AM:

This isn't going to happen, I expect, but a kickstarter for someone who wants to study how Scandinavian countries with strong social nets actually do it.

"But it's also true that they violate some of the canons of the left side of the political aisle. Capital and corporation taxes are low for example. Sweden doesn't even have an inheritance tax. The basic national income tax rate in Denmark is 3.76%, the top one 15%. The tax systems of all four countries (Denmark, Sweden, Norway and Finland) are more regressive than the tax systems of either the US or UK. Yes, top rates of income tax are higher: but they raise a great deal more money in heavily regressive and high rates of VAT."

#56 ::: abi ::: (view all by) ::: August 29, 2012, 05:25 AM:

albatross @50:
Every scheme I have ever seen proposed for a flat tax actually has two rates--a 0% rate below some income threshhold and a flat rate above it. So those are neither flat nor regressive.

As I said, flat is the whelk word.

You're just talking about a less progressive, less nuanced system. Calling such a thing flat means spending a certain amount of waste heat re-explaining how it's not each time it's brought up, then watching everyone reinvent progressive taxation from scratch.

Ideal derail material. Much like watching everyone re-prove the reasons that the government is not getting out of the marriage business anytime soon.

There are good reasons to have more than two tax rates. I could continue the process of reinventing the entire history of progressive taxation that we have begun. But instead, I'll go back to what I said above: a system that fattens a few people's Cayman Island accounts at the expense of the broad majority's ability to make consumer purchases is not good for the economy. A hundred people's ability to purchase a widescreen television benefits society much more than one person's ability to purchase a second yacht.

Not using the tax system to deal with this is throwing away a usable tool in a time of need.

#57 ::: Howard Bannister ::: (view all by) ::: August 29, 2012, 08:16 AM:

Or, shorter, the way the President said it.

We tried cutting taxes on the rich to get them to stimulate the economy. It didn't work.

We've also tried raising taxes on the rich. That worked!

Comparing the Clinton and Bush eras, obvs.

A flat tax--lowering Mitt Romney's tax burden, leaving mine more or less the same, and increasing the burden on those who earn less than me?--would be Bush redux. Bush squared. Bush to the power of ten!

Our country can't afford that.

#58 ::: Lee ::: (view all by) ::: August 29, 2012, 10:56 AM:

Avram, #48: Thank you! One of my reactions to flat-tax proposals has always been "this smells, but I can't see why," and you've just highlighted one of the places the stench is coming from.

albatross, #50: Every scheme I have ever seen proposed for a flat tax actually has two rates--a 0% rate below some income threshhold and a flat rate above it.

Well, that's enough to be able to sink the idea easily. cf. "the 53%" -- anyone who's already exercised about "almost half the people in this country pay NO TAXES" is going to reflexively despise any plan that has such a lower-income threshhold.

#59 ::: Howard Bannister ::: (view all by) ::: August 29, 2012, 11:57 AM:

Abi@41:

The tax revenues from making the rich pay their share won't fill the gap—but they're the seed money for broad-based economic stimulus. They're an investment. The returns from that investment are what reduces the deficit.

...I just saw this absolutely fascinating article.

http://www.americanprogress.org/issues/economy/news/2011/03/21/9347/were-not-broke/

It goes over American taxes, and what it would take to, say, balance the budget.

And what would happen if we used even such middle-of-the-road taxes as our Canadian neighbors pay.

In fact, U.S. tax revenues were a full 8 percentage points of gross domestic product below the average OECD developed or developing country. (see Figure 1)

Hmm.

They conclude,

And we’re not suggesting that these problems should be solved entirely be increasing taxes. But it is also true that right now we are not broke. The government is meeting all of its obligations, and there is no indication that that will change any time soon.

Emphasis added.

That is to say, we COULD fix the entire budget hole with taxes. And we still wouldn't be the highest-taxed country in the world... or even close.

That's some pretty interesting food for thought right there.

#60 ::: Howard Bannister has been gnomed ::: (view all by) ::: August 29, 2012, 12:01 PM:

It could be for the URL, but I doubt it. More likely for bloviation on a dead point. A mention of Canada? The gnomes never struck me as anti-Canuck.

However, I have some nice Wasabi snacks to share, if the gnomes are into that sort of thing.

#61 ::: SamChevre ::: (view all by) ::: August 29, 2012, 01:14 PM:

That is to say, we COULD fix the entire budget hole with taxes

But note well (because it's easy to confuse) that we probably could not fix the entire budget hole with the sort of taxes we have now, just by raising rates and broadening the base. AFAIK, all the countries with higher tax receipts than the US have much higher consumption taxes, which the US does not have at a national level.

#62 ::: albatross ::: (view all by) ::: August 29, 2012, 02:13 PM:

Scenes from the RNC convention, and what isn't being covered, and why.. Say, if you make it really inconvenient and hint that it's physically dangerous to go interview rhe protesters, who nobody can or will quite tell you how to find in the first place and who are surrounded by cops, not many people will interview them. And if you get all the powerful people inthe country to accept the idea that the ninja-suited guys and snipers and helicopters and cops barking terse orders are protecting them, say, that might be useful later on.

And the worst part of this is the way the bubble of security acts as almost a potemkin village--"for reasons of security" nobody important will ever see a protester, and so can go on thinking they don't exist. I don't know what this means, exactly, but I'm pretty sure it's not a good sign for us.

#63 ::: Howard Bannister ::: (view all by) ::: August 29, 2012, 02:25 PM:
That is to say, we COULD fix the entire budget hole with taxes

But note well (because it's easy to confuse) that we probably could not fix the entire budget hole with the sort of taxes we have now, just by raising rates and broadening the base. AFAIK, all the countries with higher tax receipts than the US have much higher consumption taxes, which the US does not have at a national level.

Er... actually, I was just reading some chatter about how the VAT and such are actually a bit more regressive than, say, using the income tax, and you might just be better off to use our current system rather than flipping over to that system.

So there's actually quite a long and engaging conversation to be had by tugging that string a little bit.

#64 ::: Howard Bannister ::: (view all by) ::: August 29, 2012, 03:00 PM:

Speaking of Romney...

But the way Romney most directly owes his success to the government is through the structure of the tax code. The entire business of leveraged buyouts wouldn't be possible without a provision in the federal code that allows companies like Bain to deduct the interest on the debt they use to acquire and loot their targets. This is the same universally beloved tax deduction you can use to write off your mortgage interest payments, so tampering with it is considered political suicide – it's been called the "third rail of tax reform." So the Romney who routinely rails against the national debt as some kind of child-killing "mortgage" is the same man who spent decades exploiting a tax deduction specifically designed for mortgage holders in order to bilk every dollar he could out of U.S. businesses before burning them to the ground.

The whole thing is an eye-opener. I mean, I know, in theory, what Bain Capital does. But this article by Matt Taibbi is.... well.

Read it.

#65 ::: The Raven ::: (view all by) ::: August 29, 2012, 07:31 PM:

Howard Bannister, #64: well, I guess he wants to deeply indebt the USA and then buy the pieces at fire-sale prices.

Wow.

#66 ::: P J Evans ::: (view all by) ::: August 29, 2012, 08:55 PM:

61
And the other piece is that those other countries don't spend anywhere near as much on their defense and its associated hardware and doodads as we do.

#67 ::: Elliott Mason ::: (view all by) ::: August 29, 2012, 10:07 PM:

Melissa Singer @52 said: some of us, without the mortgage interest deduction, would never own homes (and I'm not talking about McMansions or people who were overextended even before the collapse, but about people like me, who make what should be a livable income but because of where we live, are barely scraping by).

I've been a homeowner (well, part; me and my husband and our banks) for going on a decade now, and never in that time has the mortgage-interest deduction become relevant to us … because in none of those years would it have ever been more than our STANDARD deduction. Because we make very little money, and also both our homes (owned serially, not in parallel) have both been purchased for under $150K with 10-15% down, to give you an idea of how big the mortgages are we're talking about.

John crunched the numbers when we were looking to buy the house we have now. In order to get a mortgage-interest deduction big enough to make it worth our while to itemize (we've never had a year where it made sense to itemize at all, because the standard has always been at least twice as high as our possible itemizations), we'd have to be buying nearly twice as much house.

Now, I know you live in a more expensive jurisdiction than we do, Melissa, but still, I'm getting a little whiplash.

I also side-eye a lot of Republican money statements, because no household I have ever lived in has made more than $55K/yr, my entire life, neither the households of my childhood nor the ones I have lived in as an adult.

#68 ::: Melissa Singer ::: (view all by) ::: August 29, 2012, 11:25 PM:

Elliott: I'm not really sure how to explain it, but this is what I know. I bought my apartment 20 years ago, when I was making considerably less than $50K/year. Without the mortgage deduction, coupled with gifts from family that went for the downpayment and an interest rate of around 9%, I couldn't have done it. The interest deduction basically offset my monthly maintenance; otherwise, I would have paid essentially double what I wound up paying.

Without that, I would likely still be living with roommates or have moved back in with my parents, since the cost of living has gone up much faster than my salary, and it's highly likely I would be childless.

Publishing is not lucrative at my level; I didn't break the $60M/year barrier until relatively recently. Even with the mortgage and dependent deductions, I pay a _lot_ of taxes.

NYC has a base rate in my income bracket of about $2K plus 3.6% for every $ over $60K. NYS's tax rate is about 7% on all my income. And the federal rate is about 25%.

#69 ::: Dave Bell ::: (view all by) ::: August 30, 2012, 03:39 AM:

I'll plead a special case for us non-Americans, but even I have an idea of the number of different, overlapping, entities with some sort of tax-levying power in the USA.

And any American who just talks about Federal taxation, while shouting about states' rights, seems to me to be either a fool or a crook.

#70 ::: Melissa Singer ::: (view all by) ::: August 30, 2012, 07:33 AM:

Apologies for potentially confusing people with my reference to $60M--at work, we routinely use M rather than K to indicate thousands, so I have to think while typing in order to change. Managed it in the second part of the post but didn't read closely enough on preview to catch that first $60M, which should have been $60K.

#71 ::: Howard Bannister ::: (view all by) ::: August 30, 2012, 08:47 AM:

Mortgage interest deduction is relevant to me. As long as I continue to pay more than 2000 a year, all my other deductions push me over the standard deduction.

Meaning that the mortgage interest piece is pure gain for me.

Less important to me now, as I've struggled through some raises to get to a point where it's less critical to survival. Over the past ten years, I basically would have had to sell the house (probably at a loss) without it.

But the idea that Bain used that same deduction to making their raiding work...? No, sorry, just no. I'll give up my house and rent a tiny one-room apartment if it means sinking vulture capitalism.

(or, of course, in the middle path, we could make sure that it only applies to, say, mortgages on the home you reside in.... but that's CRAZY TALK!!!!)

#72 ::: SamChevre ::: (view all by) ::: August 30, 2012, 10:53 AM:

Howard Bannister @ 64

The Taibbi article is a grand illustration of "fractally wrong".

I think the fundamental problem is not with private equity. It's that a lot of widely-used business practices--used by reputable corporations like GE[1] and reputable governmental institutions like CalPERS--are really fundamentally unreasonable and unfair, and private equity does them a lot. But it's not a private equity problem: it's a pension funding rules problem.

1) Have I noted that I work for a company that GE bought, stripped, and spun off, screwing me and many others in the process?

#73 ::: Howard Bannister ::: (view all by) ::: August 30, 2012, 11:24 AM:

Query, Sam: does Taibbi's framing really place private equity and only private equity as the problem?

It seems to me more that he is focusing on the actions of private equity because Mitt Romney's words about public debt are so incredibly contradictory to his actions with regard to private debt.

I.e., not that this particular business model or business practise was the worst in America, but that it is a harmful business practise that relies on taking out large loans and having other people pay them back.

#74 ::: David Goldfarb ::: (view all by) ::: August 30, 2012, 07:22 PM:

Melissa Singer @70: In all honesty, I didn't even notice.

#75 ::: Bill Stewart ::: (view all by) ::: September 04, 2012, 01:30 PM:

abi@41 Secondly, I've lived in a country where pretty much every sane politician was a socialist. On the one hand, it wasn't such a bad place to live (well, apart from the climate, but you can't blame an economic system for that). On the other hand, the experience made me quite clear on the fact that Obama is nowhere in the neighborhood of socialism.

People's Republic of Berkeley? :-) (Yes, I know you probably mean Scotland, and this post is nearly a week late, but...) California city and county elections are officially non-partisan, though they're often run by "non-partisan" groups that align with political parties. When I lived there in the late 70s, the city government tended to alternate between the Berkeley Democratic Club (liberal Democrats, who were as close as Berkeley got to a right wing), and Berkeley Citizens' Action (the socialists who were the lead party that year.) These days it's mostly the same people, except they're now old gray-haired lefties instead of young long-haired lefties, and the big political issues are still mostly streets, schools, budgets, same as they always were.

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