Tuesday, July 10, 2012

Gimme Shelter

Politics ain’t beanbag. We have heard that expression lots of times, usually when a campaign spokesman has been asked about some underhanded tactic used by his own campaign or someone else’s.

But I think the general way in which a politician runs a campaign says a lot about him. Sure, they all are going to make cheap shots from time to time or tolerate cheap shots made by others working on their behalf. I’m not Pollyanna. I understand that. But when basic arguments made by a candidate are consistently and fundamentally dishonest, it makes it hard for me to support that candidate.

When Barack Obama ran for the presidency four years ago, he ran a generally positive and forward-looking campaign. Of course, it was easy then. He had hardly any record to defend politically and, as a non-incumbent, only had to criticize the job done by President Bush and the Republicans (conveniently downplaying the fact that Democrats were already in control of the House of Representatives).

Things are different this time. Now, finally, Obama actually has a record to defend and it includes persistent and historically high unemployment. He has little choice but to go negative. Actually, he did have a choice. He could have instituted policies that would have resulted in a better economy. He didn’t have to listen to Republicans to do that. Bill Clinton, who presided over a very strong economy, could have guided him. But there is no time left to change things around now, so he has no real choice but to go negative on Mitt Romney.

The best way to confront Romney would be to come up with a better plan than Romney to fix the economy. Romney has endorsed Paul Ryan’s budget, which puts him on the defensive because it provides plenty of specifics to attack. But Obama refuses to endorse any plan. He talks vaguely about a “balanced approach,” which essentially means raising taxes on the wealthy. There’s nothing wrong with that, but it will make precious little difference to the deficit and will not help the economy very much. Middle-class tax increases (including people who currently pay no net income tax) would go a lot farther in shrinking the deficit, but that would be political suicide.

The president’s lack of action on the economy since his last stimulus failed is enough reason to think twice about reelecting him. He appears to have no more ideas or maybe he will feel safe in putting them forward only when he doesn’t have to face another election. So instead, he pretty much spends all his time campaigning. And the way he campaigns gives more reasons to think twice about voting for him.

The Irish media took note the other day when the BarackObama.com web site cited Ireland as a tax haven. This comes as a surprise to people living—and paying increasingly higher taxes—in Ireland. The web site has a chart that shows assets that Romney has (or has had) in Ireland as well as Bermuda, the Cayman Islands, Luxembourg and Switzerland. Most of these boxes on the chart include a line that reads, “Value: Not disclosed in tax returns” as well as the applicable local tax rate. (The 12.5 percent rate listed for Ireland is the business tax rate and probably lower than the applicable one in Romney’s case, which seems to be a blind trust investment fund.) The implication is that something underhanded or shady is going on. And that Romney is somehow avoiding paying taxes to the U.S. Treasury.

I have been filling out tax returns for decades and none of them has ever asked for the value of my accounts. The IRS only wants to know what my income is so that it can tax it. U.S. law—and this is something I know all too well—requires U.S. citizens to pay taxes on all income, no matter where in the world they are living, earning money or investing. If these accounts appear on Mitt Romney’s tax returns (and the chart tells us they do), then that means he is paying the full U.S. tax rate (at the very least) on any income they are earning for him. If the local rate is higher than the U.S. rate, then he would also be paying to the difference between the two rates to the other country.

One of the privileges of being a U.S. citizen is that you cannot legally avoid paying income tax to the U.S. government no matter where you live or invest. Just ask Facebook co-founder Eduardo Saverin, who has given up his U.S. citizenship to live in low-tax Singapore. That the Obama campaign does its best to imply otherwise shows not only desperation but a lack of honesty.

The way Romney’s tax returns have been twisted and manipulated in a blatant attempt to vilify him solves the mystery (if there ever was one) of why candidates hate to release this information and usually don’t until they absolutely have to.

Is the larger point the fact that Romney is a parasite who sucks wealth out of America and sends it abroad? The president would like you think so. But the two most salient points are these. First, Romney clearly knows how the economy works and how to generate wealth. Second, wealth has a tendency to flow from high-tax countries to low-tax countries. If those two facts make you want to keep living with high unemployment, then your choice in November will be simple.

Perhaps the most dishonest aspect of the way the president is running his campaign so far is that he wants to make it a fight over wealth that has already been generated. If the country’s overall standard of living is not to slip further, he needs to start focusing on generating new wealth—instead of trying to reallocate the shrinking wealth that is already out there.

No comments:

Post a Comment