I’m not, of course, but if I was – and you asked me about taxes …
Now, you’ve asked me about Gov. Romney’s taxes and if I could prove he had done anything illegal. That’s not the point. I fully trust that Romney followed the law very carefully and did nothing illegal. After all, he has enough people helping him fill out his taxes; he ought to be able to get them right.
No, I believe what he did was legal. And you know what, if I ever made $20 million in a year like he did, I’d certainly try to limit how much tax I paid. That’s as American as it gets.
Tax law is unfair
No, the issue is that he could do that. The issue is that it turns out to be legal – if you make $20 million a year – to pay very little in taxes. It turns out that the tax law permits you to pay less as a percentage if you make $20 million, $50 million or $100 million than if you make $40,000.
And Romney isn’t alone in this. You remember how Warren Buffet, the very successful, very wealthy, investor, revealed he paid a lower rate in taxes than his secretary?
Well, those are just a couple of examples. Romney indicated he has paid “at least 13” percent of his income in taxes over the last ten years. OK, but the national average is 17 percent. Once again, I don’t think he broke the law – but why is the tax rate lower on $20 million than on $40,000?
Tax law is complex and arraigned for those with resources
You all know what paying taxes is like. Each year you go to fill out your taxes and the forms get longer and longer. You have so many numbers going back and forth that at the end that you can’t honestly decide if you cheated the government or if the government cheated you.
Now if you have millions of dollars, you can hire an expert to figure it out for you. If the IRS doesn’t agree, and you have millions, you can hire other experts to go fight the IRS for you.
And if you have millions of dollars you can hire people who keep track of the tax code and can tell you to put your money here or adjust the ownership of something in order that you can pay less tax.
If you work a salary job for a living, and get a single W-2 at the end of the year – you don’t have most of those choices. Most of us can only put a few thousand in a retirement account every year. Romney has a retirement account with $102 million in it. And it was probably all legally done. Legal, but not something you or I can do.
Romney’s hidden returns
Romney has only released one year of returns and says he’ll release another year in October. This is not what most recent nominees for president have done, and he won’t say why he is doing anything different.
There has been a lot of speculation that he is hiding something illegal. I don’t think so. I don’t believe that. I think it is something different: I think he understands that many Americans will be amazed at low little in taxes you can pay if you are wealthy and amazed at the convoluted techniques you can use to save on taxes.
After all, in Romney’s 2010 return there are 55 pages – fifty-five! – devoted just to his dealings with foreign entities. Most of us would have no way of doing anything like that.
Overseas accounts
Romney has also taken some flak for having a Swiss bank account and money in other tax havens around the world. He says there is nothing illegal about that, and he is likely right.
Some have attacked him as if there was something unpatriotic about investing in countries around the world, and the governor has rejected that notion. I reject most of it, too: We buy from countries all over the world, we sell to them and many companies in the U.S. outsource jobs all over the world.
Some have said he invested in the Cayman Islands and Switzerland to lower his taxes even more. That would be the logical thing to think. The governor says, no, he didn’t get a single dollar reduction, not a single dollar less, in his taxes from this.
So, why did he invest his money in those tax havens? Perhaps he thought the dollar would fall in value compared to the Swiss franc or the Euro. In other words, he was betting against the U.S. dollar. That might be a smart investment move, but it does seem like an odd thing for someone running for president to do. So maybe someday he can explain to us why he invested in those countries.
Changing the law
As interesting as figuring out where the governor put his money is, it really is beside the point. Every citizen has to obey the law, and every citizen gets to take advantage of what the law might allow them to do.
But citizens also are participants in the process of creating and changing laws. Each of us is. And so if we disagree with a law because we think that law gives us an unfair advantage, maybe our ethics compel us to forgo taking that advantage. And if we get a chance to say what we want the laws to be, then we cannot just put up a smoke screen and say, “The law is the law and I obeyed it.”
Gov. Romney wants to be president. He wants to propose changes to the laws in general and the tax laws in particular to make them better.
So, Romney, the question is how you would change the tax law. And what do we know about you on this subject? We know you enjoy the law as it is, because you took advantage of everything it offered. We know you think that is no one’s business but your own, because you have been so vague about your money.
And we know this: You think the law doesn’t give you enough advantages. That’s right, you are not content with just paying 4 percent under the average of the average working staff, you want to pay even less. You’ve got a $100 million put away for retirement and you think that isn’t enough. You are worth $250 million and you think that isn’t enough.
And the way you’re going to get more isn’t by building products, or providing services to those who build products we all want to buy. The way you are going to get more isn’t even by cleverly figuring out which companies will make money.
No, the way you are going to get more money for yourself and your cronies is to take it away from people who earn less in a year than you do in a week.
And that is what is wrong with your taxes.