The Democratic party has the reputation as the paternalistic party — the big government party that seeks to control more of your life and make decisions for you because they know best.
The Republican party tries to present itself as an alternative to paternalism, as the small-government party that trusts you to make more decisions and have more freedom. But their all-but-certain nominee Mitt displays an arrogance and lack of respect for our intelligence that comes across as paternalism — he’s smart and rich and successful, so he knows better than we do what we need, and he will make the decisions for us.
If we’re so smart, then why don’t we have $250 million and accounts in the Cayman Islands and an oceanfront estate in La Jolla. I would suggest that many of us don’t have his net worth not because we lack his intelligence or willingness to work hard, but because we lack his ruthlessness and don’t want to destroy companies and fire people, and also because we weren’t born on third base as he was as George Romney’s son, which opened doors for him when he started his career.
In his campaign appearances and interviews, Mitt condescends to us, offering simplistic explanations, very much the father figure. He’s Ward Cleaver, and we’re Wally and the Beaver. And we know he thinks June belongs in the kitchen or vacuuming in pearls and heels.
I wonder if this is one reason why Mitt’s unfavorables are so high among Republicans and Republican-leaning Independents. These are folks who reject Dem paternalism, but can’t escape it with Mitt.
The cartoon character Popeye the Sailor Man (I know, I ‘m showing my age) used to say, “I yam what I yam.”
And this morning, when questioned about his Cadillac reference, Mitt Romney told Chris Wallace “I just am who I am.”
I’m not a Mittens fan, but I think the Cadillac flap is silly. We know the guy is worth at least $250 million. People own stuff (houses, cars, boats, jewelry, art, etc.) that reflects their income and their net worth. The two Cadillacs aren’t even top-of-the-line Escalades, such as Newtie owns.
We have bigger fish to fry with Mitt. He still hasn’t clarified if his Cayman Islands accounts helped him avoid the Unrelated Business Income Tax (UBIT) on his IRA, for example, a question first raised by Talking Points Memo and picked up by the NYT. I’m much more interested in tax avoidance schemes than in how the super rich spend the money left after they pay what they owe.
Mitt runs around reciting the verses to AmericatheBeautiful at his campaign events to show what a great patriot he is. But how patriotic is it to use the tax haven of the Cayman Islands to avoid the unrelated business income tax (UBIT) on investments made by your massive IRA.
Since Brian Beutler from TalkingPointsMemo first raised the question, the Romney campaign has not responded as they promised they would, which leads one to believe that the answer would prove embarrassing. Mitt can avoid Brian Beutler (and me!), but the NYT has raised the question.
Eventually Mitt will have to answer whether he set up offshore accounts to avoid the UBIT, as appears likely. So here’s a guy already blessed with a 15% tax rate on his earned income (because it’s carried interest) and his investments (because of the capital gains rate), scheming to avoid the 35% UBIT portion of his taxes.
Mitt’s campaign is trying to downplay the fact that Mitt has parked a chunk of his money in the Cayman Islands, telling reporters that there’s nothing to see here, so move on.
But Brian Beutler from TalkingPointsMemo, thanks to some help from NYU tax lawyer Daniel Shaviro, has figured out what to ask. There is a 35% tax on IRA’s called the Unrelated Business Income Tax (UBIT) that is triggered when an IRA borrows money for investments.
Beutler specifically asked Mitt’s people if Mitt’s IRA had off-shore investments that would have triggered the UBIT if they were on-shore.
If and when he gets an answer, I’ll let you know what it is.
Clearly, Mitt’s finances aren’t randomly structured and his taxes aren’t done at a strip mall by H & R Block. There are technical reasons behind all these decisions, and you have to assume they are to avoid taxes and/or legal liability.