By Andrew Mellon
Tax Correspondent
Whatever happened to Mitt Romney, millions were not asking?
Last week, we found out: he landed on the terrible New York Times Op-Ed pages with a stirring call for...higher taxes on the rich!
Wait a minutes, this Mitt Romney? The Mitt Romney who told his plutocratic funders in 2012:
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| Mitt Romney's back! |
There are 47 percent of the people who will vote for [Obama] no matter what. [They] are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it....And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax....[M]y job is is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.
It was hardly the first time that the Mittster showed his contempt for the lowly peons whose suffering had made a fortune for him in his career as a flipper and stripper of once-great enterprises. He was one of the pioneers of the private-equity formula for success: find some old company, buy it with mostly-borrowed money, strip it of its assets, cash, and workers, and then flip the carcass to some other sucker. Repeat as frequently as needed to amass $270,000,000.
Don't believe us? Here's what well known lefty Maureen Dowd said just before her retirement from journalism:
Romney may have been a Wall Street predator, looter and vulture gnawing at the carcasses of companies and plotting a White House bid in diapers to finish what his dad started, as his Republican rivals have portrayed him. “Make a profit,” a younger Romney laughingly says in the attack film financed by supporters of Newt Gingrich. “That’s what it’s all about, right?”
Lighten up, Emma Goldman.
What caused Mitt Romney, surveying the world from atop his mountain of loot, to have a change of what we'll call for argument's sake heart?
It's not that he was moved by the plight of the less affluent 90% of America who, except for a brief period during the Biden Administration, enjoyed none of the huge gains in national income since oil prices stabilized in 1980.
No, he's worried about the projected shortfall in the Social Security Trust Fund, an artifact of Roosevelt's genius idea to prevent Republicans from slashing Social Security. This 23% shortfall would have to be made up from general revenues. Like the trillion-dollar defense budget.
This in turn, combined with the generations of tax cuts for the rich championed by plutocrats like the Mittster, would according to him lead to higher debt and hyperinflation.
Now we're getting somewhere. If you've got a, to use the technical macroeconomics term, s***ton of money, nothing scares you more than the prospect that you money might become next to worthless. And you can't eat car elevators.
This terrifying possibility (ridiculous according to anyone who actually knows economics) has led Romney to embrace the fearful alternative: higher taxes.
What's on his menu?
First, he wants to raise or remove the current limit on payroll taxes (currently $176,000). This tax increase would fall most heavily on upper middle class professionals like doctors and lawyers. But they vote Democratic anyway, so they deserve it! The tax might not affect the ultra-rich plutocrats who don't rely on wage income, or if it does, it would be not even a grain of sand to the likes of Ketamine Leon Musk and his $500 billion hoard, on which he has paid precisely zero taxes.
Even a mind as clouded as Mitt's realizes this. So he goes on to propose tax increases, not on plutocrats, but on their mouth-breathing offspring. He points out that under the current tax regime, Ketamine Leon can pass on his $500 billion without ever paying even capital-gains tax due to an obscure loophole which provides that the basis of such windfalls is valued on the date of death.
This means that Ketamine Leon's 563 children, or whoever inherits his wealth, should they sell their $500 billion (or whatever its value on the holiday of Leon's demise) windfall for cash, would only owe taxes on the difference between $500 billion and what they sold it for (if higher). If they got less than $500 billion, they pay nothing.
The ostensible rationale for this pro-Don Jr. windfall is that it is too difficult to apply the dead guy's basis to calculate tax due on sale. We still remember brilliant tax lawyer Marty Ginsburg telling us some 40 years ago that this was, to use his hypertechnical jargon, “bullshit.”
There's another tax though that might hit Leon's Master Race offspring: an estate tax which plutocrats have tried to repeal for decades. This is a tax levied on the value of very large estates. Mitt doesn't mention it, although he knows about it.
We know this because he has avoided estate tax liability on untold millions through a loophole he pioneered. Under this scheme, when Mitt or one of his fellow plutocrats sets up a new fund for flipping and stripping – excuse me, private equity, he takes one simple step on day one.
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| “A wealth tax? On one million dollars?” |
Although he expects the fund to raise billions of dollars and his own partnership interest to be worth tens if not hundreds of millions, on day 1 he and his co-conspirators “seed” the new fund with say $1,000. He then contributes his, let's say, 30% partnership interest into an IRA for his kids. The contribution limit for IRA's, intended for small savers, is $3,000. On the day of contribution, his interest is nominally worth 30% of $1,000, or $300.
He knows full well that it will be worth more like $50 million, but by then it's safely tucked into the IRA tax-free until his heirs many years from now take relatively small taxable distributions from it.
Funnily enough, he doesn't mention closing that loophole.
There's a similar scam involving putting interests in early-stage companies and funds into a Roth IRA with similar huge tax-dodging benefits for the truly greedy.
Romney also doesn't mention the straightforward wealth tax, which would require those with huge wealth (say at least $50 million) to pay a modest amount (between 2% and 5% of that total) as a wealth tax, in recognition of the outside rewards such plutocrats garner from a government that protects their property and their necks from the guillotine.
This proposal has garnered furious opposition from those subject to it, who have threatened to flee to Florida or Mars to avoid paying it. We suspect they're not leaving their Woodside compounds anytime soon.
So while Mitt gets a caffeine-free cookie for admitting that he and his ilk need to pay more, he hasn't quite been able either to admit the reason: so that all Americans can enjoy some level of economic security without worrying about how to pay for fripperies like staying alive when they're sick.
He also hasn't been able to embrace the fairest solution: the wealth tax.
Finally, having written one column, Mitt seems content to rest on his skis. He could go on to do the hard work of advocating for tax equity, and even funding that advocacy. You could call it “missionary work.” Mitt knows about that too.
But we should applaud his baby steps. Maybe someday other New York Times hacks like David “My Dinner With Jeffrey” Brooks will be inspired to take a step into the light.
You'll pardon Mitt if he doesn't bet even a minuscule percentage of his $270,000,000 on it, though.
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