Romney’s Taxes – Gentlemen’s Games and Morbid Curiosity

August 17, 2012
Posted by Jay Livingston

Mitt Romney still refuses to make his tax returns public.  Instead, he now says that for the last ten years he’s never paid less than 13%.  The response from the Obama campaign: Prove it.

The Romneyites are in high dudgeon about this request.  To ask to see the actual returns rather than accept Mitt’s word, why, it’s so uncouth, so ill-mannered. Such curiosity is ungentlemanly; it borders on the morbid.

W.C. Fields fans will no doubt remember the scene in “My Little Chickadee,” set in the old West, where Fields (Cuthbert J. Twillie) approaches a stranger in a saloon. He offers to play a game: cut the cards, high card wins. They agree to play for $100. The stranger accepts and cuts a king.

FIELDS  
Don't show me the cards. A gentleman's game. 
I don't want to look at it.

Fields then cuts.  The camera can see that the card is a two, but the stranger cannot.
“Ace,” Fields announces and puts the cards back on the deck.

STRANGER
I didn't see it.

FIELDS
[He turns the deck face up and thumbs through it 
till he finds an ace, which he holds up for the stranger to see.]
Very well, here you are, Nosy Parker. Ace. 
I hope that satisfies your morbid curiosity.


(For full effect, this  should be seen, not transcribed, but alas, I cannot find an embeddable clip..  You can watch the scene here. It’s less than 2 minutes.)

There are good reasons to have some morbid curiosity about those tax returns.  Thirteen percent sounds reasonable, though it’s far less than what you pay if you earn a salary of $75,000.  But thirteen percent of what? As Jonathan Zasloff says,
If Romney’s income (mostly from capital gains) was, say, $10 million a year, but $9 million of it is in a tax shelter in the Cayman Islands,  Romney could pay $130,000 on the $1 million and call it $13%.  But in fact, he would be paying on his real income only 1.3%. 

And that’s just a simple version.  Given the complexities of the tax code, Romney could have done much more creative accounting.  Another law professor, Victor Fliescher, has a slightly more complicated scenario (here).  Fleischer’s specialty is tax law, especially carried interest, so he knows that this is not a gentleman’s game.  To Romney’s 13% claim, he says in a most ungentlemanly fashion, “I call bullshit.”

6 comments:

Bob S. said...

Why does it matter what amount of taxes Romney paid?

No one is accusing him of doing anything illegal, now are they.

Nope, what this is an another witch hunt over what is "fair" for someone to pay.

Never mind the fact that the tax returns he has released has shown him to have contributed significantly to charity. That he has used the law to reduce his taxes -- as most people should.

If there is a tax shelter you don't like -- work to get rid of it.

How about this -- you can call bullshit on Romney when you make all your tax returns available, eh?

Bob S. said...

new post and no release of your taxes -- I wish I could say I'm surprised.

Jay Livingston said...

1. The issue of fairness is not a witch hunt. It is not a search for some non-existent malefactor. I 35% in income tax for the last ten years – more than double Romney’s 13%, I’d say that’s unfair, though it seems you would disagree. But taxes are not witches. People who use the legal complexities of the tax code to minimize what they pay are not witches. But maybe if the public knew how a millionaire like Romney manages to pay a lower rate than do than we fools who work for wages, it might cause some pressure to change those loopholes. Probably not, given who has influence and who writes the tax codes, but maybe.

Every other candidate has disclosed many years of taxes. So have candidates in the past. So did Romney's dad. Mitt's refusal to do so does raise the question of what he has to hide. After all, as you say, he committed no crimes. Or at least he has not been accused of committing any crimes.

Bob S. said...

Jay,

Why is it unfair? Because your don't like the fact he gave more to charity? That more of his income came from a type then you had coming from that type?

You talk about fair but let me ask; do you make more then the janitor or support staff at the college?

But maybe if the public knew how a millionaire like Romney manages to pay a lower rate than do than we fools who work for wages, it might cause some pressure to change those loopholes.

Please feel from to insult yourself but refrain from insulting me. I am no fool whatever you may be.

Yes, it might but they don't have to see Romney's tax returns to learn that -- all they have to do is learn about the tax code. Do you think it is 'fair' to invade someone's privacy for a 'teaching moment'?


Every other candidate has disclosed many years of taxes.


Who cares what every other candidate has done? It is time to stop the nonsense and if Romney steps up and says enough is enough; more power to him.

It only raises the question of what he has to hide IF you see the issue of privacy as a guise for criminal action.

I'm not accusing you of committing any crimes but I have to wonder what you have to hide since you aren't publishing your returns....eh.

Jay Livingston said...

1. There’s a difference between private citizens and public officials. Nobody expects a private citizen to make his tax returns public. But for candidates for high office, many people would like them to do so. You are not among them, though I wonder if that would be true if Obama were the one keeping his tax returns secret.

2. We don’t know how much Romney he gave to charity. We don’t know how much he parked in the Cayman Islands. We don’t know how much he put in other tax dodges. We don’t know because he’s keeping it all secret, except for what he claims in his public statements. BTW, I gave $2 million to charity last year.

3. Professors and janitors, Salaries and tax rates are completely different issues.

4. Different tax rates for different income. Suppose that the education lobby got Congress to reduce the tax on teachers’ incomes to a maximum of 5%. After all, we need to attract people to teaching. I’d pay 5%, and you’d pay whatever it is you pay. You’d have no problem with that, right?

Bob S. said...

1. There is a difference because we've created that artificial distinction. What is a public official but a person who should be serving the people?

I'm tired of giving the 'public officials' special privileges. I'm tired of requiring people to open up their lives to the extent it satisfies people like you.
I haven't called for Obama's tax returns but now that you mention it - isn't it amazing the press can find a picture of a shirtless Paul Ryan and publish it but very few publish the picture of Obama smoking dope. Very few talk about Obama's law school records, his other college records, etc.

If you want to play the tit for tat game -- better start with your own candidate.

2. That is a flat out LIE. We have seen Romney's tax returns including how much he has given to charity. What you haven't seen is all his tax records to the point you are satisfied. Please release the breakdown of your charitable giving before requiring it of others. There is a scripture that really seems to apply - something about a mote in his eye and a plank in yours.

Why should you expect another person to give up privacy if you aren't willing?

4. You were talking about "fair" so is it fair you make more money then the janitor or the dishwasher in the cafeteria?
What we are really talking about is income redistribution to a level you consider fair -- yet again you won't play first.

You want Romney to give back to society enough money to satisfy you but you aren't making your salary equal to the others in the system. Why?

Now in your charitable giving, did you use it to offset your tax rate?

How is that any different from what Romeny did?

4. I would have a problem with it but not for the reason you think.

I would have a problem because it is outside of the enumerated powers of Congress to do so

It is not the job of the government to solve every problem in the country. We need less regulations and tax havens -- weren't you just complaining about that?

So when are you going to release your tax returns -- obviously if you don't, you have something to hide, right?