Mitt's Poverty Level Tax Rate

Nothing on Earth invites speculation from the punditry more than ignorance. Pundits get paid to do two things; to make predictions and to know things you don't. "I don't know" is probably written on some stone tablet of Forbidden Phrases somewhere. As a result, people take blind stabs at issues they couldn't possibly know anything about. One of those issues has been Mitt Romney's tax returns. Why was he reluctant to release them?

One of the blind stabs was that maybe Mittens didn't pay the required 10% tithe to the Church of Latter Day Saints. Score one for blind stabs -- he probably hasn't. "Mr. Romney reported $21.7 million in income [for 2010]," Wall Street Journal reports. "He paid $3 million in federal taxes, slightly more than the $2.98 million he made in charitable donations. At least $1.5 million of his charitable donations went to the Mormon Church." $21.7 million, $1.5 million tithe. You do the math. Mitt's shorting his church a bit.

But while that figure might get the attention of a certain Tabernacle in a certain Utah city, it's not what's drawing everyone else's. Our attention is drawn to the fact that Romney's tax bill adds up to somewhat less than even the absurdly low 15% estimate Romney gave in South Carolina. Specifically, 13.9%. You could argue that a little more than one percent difference amounts to splitting hairs, but when it's a percentage of a number like $21.7 million, we're talking about some pretty big and split-worthy hairs. It's the difference between the $3,016,300 Romney assumedly paid and $3,255,000 15% would've had him paying. You could feed and house a family on his rounding error.

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The GOP's Idea of 'Tax Fairness'

If anyone needs any more evidence that the Tea Party are a bunch of chumps, here you go; the Tea Party -- which many say stands for "Taxed Enough Already" -- supports a political party that openly argues for raising most of their taxes.

Talking Points Memo:

You can almost always count on Republican presidential candidates to be united in their opposition to more taxes for the rich. But this time around, the 2012 field is standing lockstep behind a less traditional idea: the middle class pays too little in taxes.

Thanks to a strange convergence of conservative ideological trends since President Obama’s election, Republicans now are expected to protest the entire bottom half of taxpayers’ contributions as too stingy even while they proclaim Americans are “Taxed Enough Already.” And they’ve yet to figure out a policy that will satisfy both complaints at once.

In recent months, nearly every major Republican candidate has name-checked a popular statistic that 47% of Americans who file taxes paid no income tax in 2009. Given the GOP’s anti-tax zeal you’d think they’d be celebrating. Nope!

Keep in mind, this is the same side of the aisle that argues that taxation is theft. So, by their own reasoning, they're now arguing that government needs to steal from more people than it already does.

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It's Come to This: Republicans Want to Raise Taxes on Consumers

The overthrow of Libyan dictator Moammar Qaddafi is the important story of the day, to be sure. Foreign policy wonk Steve Clemons calls it a "huge win" for both the Libyan people and President Obama, while showing some understandable trepidation over what happens next. Juan Cole breaks down what the event means through the process of elimination, shooting down myths we're sure to see crop up again and again in the coming days and weeks. For once, the story of the day deserves to be the story of the day.

But the problem with the big stories is that they tend to crowd out other stories. With a 24/7 news media, this should not be the case, but it is. It's rational in a sort of televised car chase way; even if nothing's happening right now, it's inevitable that something will -- the chase will end one way or another -- and if you cut away to cover something else, you may miss the big crack up (or, as is more often the case, the anticlimactic peaceful arrest). In this case, if network cameras take their viewfinders off Libya, they may miss the money shot of Qaddafi himself being arrested or gunned down or blown up or even fleeing.

But the real world doesn't cooperate with the media world's programming decisions. Things are scheduled to happen linearly; people in the world aren't waiting for Qaddafi's last hour as dictator to run out before moving on to other things. It all goes on simultaneously, with stories overlapping. If one story becomes the story, other stories get sidelined. Take, for example, the fact that Republicans want to raise taxes on nearly half of Americans:

Associated Press:

News flash: Congressional Republicans want to raise your taxes. Impossible, right? GOP lawmakers are so virulently anti-tax, surely they will fight to prevent a payroll tax increase on virtually every wage-earner starting Jan. 1, right?

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An Unsustainable Free Ride for the Wealthy

Let's start out by talking about a flat tax. At one point, a flat tax was all the rage among conservatives. For many, it's still a fave. When someone on the right talks about "simplifying the tax code," what they really mean is flattening the tax rate. If everyone paid the same percentage and there were very few deductions, everything would be "fairer," they argue. People making a lot of money are "punished for success" by being pushed into a higher tax bracket. Never mind that this "punishment" doesn't seem to be much of a deterrent, since the total number of US millionaires is expected to double by 2020, as the income inequality between the wealthy and everyone else grows at an astonishing clip. The wealthy are gluttons for this particular punishment, apparently.

Now, keep a flat tax -- the conservative favorite -- in mind while you read this quote from an op-ed by Berkshire Hathaway CEO Warren Buffett, one of the richest people in the world.

Last year my federal tax bill -- the income tax I paid, as well as payroll taxes paid by me and on my behalf -- was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income -- and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine -- most likely by a lot.

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Caterpillar Exec to Congress in May: "Make Our Crime Legal"

I was cruising through Reddit last night when this item caught my attention:

Bloomberg News:

Caterpillar Inc. used offshore subsidiaries in Switzerland and Bermuda to avoid about $2 billion in U.S. taxes from 2000 to 2009, boosting its earnings through a "tax and financial statement fraud," according to a Caterpillar executive’s lawsuit.

The company, the world's largest construction-equipment maker, sold and shipped spare parts globally from an Illinois warehouse while improperly attributing at least $5.6 billion of profits from those sales to a unit in Geneva, according to the suit filed by Daniel J. Schlicksup. He was a global tax strategy manager for Caterpillar from 2005 to 2008.

Schlicksup, 49, sued in U.S. District Court in Peoria, Illinois, in 2009, claiming he was moved to a job that limits his career opportunities because he complained to superiors that the "Swiss Structure" ran afoul of U.S. tax rules. He's seeking a court order to give him back his old job and prevent any retaliation. He also seeks stock options that he claims were wrongly withheld as well as legal fees and punitive damages.

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At This Point, Supply-Side Economics Could Hardly be a Bigger Failure

Cut taxes and you create jobs. Cut taxes and you create jobs. Cut taxes and you create jobs...

Say it over and over and it becomes true. Never mind that supply-side reasoning sets basic economics on its head and argues that it's not demand that drives employment, it's low taxation. Cut taxes, create jobs, end of story. It helps that the argument behind supply-side economics almost seems logical; if taxes are lower, businesses can afford to hire more. I say "almost logical" because that's the problem -- it fails to consider history and the facts, considering instead the world the way supply-siders wish it was. It isn't rational.

Demand drives job growth, because employers hire people they need. More demand, more need for workers. A bakery that can't keep up with demand for its bread hires more bakers. It will not hire more bakers than it needs. And if taxes are so low that the bakery is flush despite weak demand, they still won't hire more bakers if they don't need them. Who's going to hire employees to sit around and do nothing, simply because you can afford to? You take that extra money and you put it where it belongs -- in your pocket. You're a business, not a jobs program or a charity.

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