Sunday, August 26, 2012

Fine print

We all remember the ruckus when a while back the President let out with the comment that "the private sector's doing fine." The howls of indignant protest went up about a president who was out of touch, aloof, a man who did not feel our pain. Maybe some of the criticism the comment earned the President was warranted, while he was trying to parse a distinction worth noting (that what private sector recovery we do have is being factored back by the broad effect of austerity on public sector employment), he was losing the forest for noting the different species of tree. The big picture should be better. His job is to have some sense of that.

That said, I think it's almost poetic that President Obama's opposing number came out with words very much along the same lines this past week. Alex Klein writing for the Daily Beast describes "Romney's gaffe" this way:

Romney Thursday night declared—to a group of rich donors, no less—that “big business is doing fine in many places,” partly because these larger corporations “know how to find ways [to] save money by putting various things in the places where there are low tax havens around the world.”

Business doing "fine" —the political sonics of Romney's use of the word are every bit as ripe for exploitation in our political climate as when the President found himself excoriated for saying much the same thing. Klein points out:

Romney’s words on taxes play to practically all of his core, and major, political weaknesses. Highlighting “big business” success resonates with the corporate fat-cat caricature. Attributing that success to “low tax havens” is even worse: a reminder of Romney’s own vast global holdings – from Bermuda, to Switzerland, to the Cayman’s – which have allowed him to defer his tax burden and multiply investor wealth far from American shores.

But the worst part of "Romney's gaffe" —Klein notes— is that he is right.

“Big businesses” are doing disproportionately well in the slowly recovering economy. And those large corporations do take disproportionate advantage of complicated, compliance-intensive global tax deferral strategies and holding companies. The truth of Romney’s words–combined with their applicability to his own professional fortunes–only makes them more politically toxic.

I'll admit that when I first read Klein's piece my glib reaction was that electing Romney as a tax reformer to champion fairness would be a little bit like asking Howard Stern to head up the FCC... so as to restore tact and decorum to the airways. But in fairness, as Klein himself cites a Romney spokesman, "Governor Romney has long said we need to simplify the tax code, close loopholes and create a more level playing field for American businesses.” With his Bain resume´ (or should I say 'portfolio?) we can certainly allow that Romney knows the topography of that somewhat less than level playing field as it lies. Maybe he has some good ideas about how to level it. Maybe you could compare us asking Romney to reform our tax system with FDR asking a free-wheeling financier like Joseph P. Kennedy to head up the SEC back in the day.

But I would suppose this is where the fine print starts to matter. The question arises: what exactly does Candidate Romney propose?

The Tax Policy Center released a report earlier this month, a paper that "documented both the promise and the difficulty of base-broadening, rate-lowering tax reform," as Donald Marron put it in a piece for Forbes magazine:

[The TPC Report] found, subject to certain assumptions..., that any revenue-neutral plan along the lines Governor Romney has outlined would reduce taxes for high-income households, requiring higher taxes on middle- or low-income households.

In a kindly frame of mind, Marron hedges:

I doubt that’s his intent, but it is an implication of what we can tell about his plan so far. (We look forward to updating our analysis, of course, if and when Governor Romney provides more details.)

There's the rub, though... those details.

In the the most polite language possible, Marron's piece in Forbes qualifies The Tax Policy Center report:

"...the authors had to confront a fundamental challenge: Governor Romney has not offered a fully-specified plan... As a political matter, such reticence is understandable."

And if we let Romney get away with that reticence, right up to election day, well... that will be on us. It will be on the dumbed down nature of our own debate.

This past weekend the Obama camp was busy crying foul over Romney's inept attempt at standup comedy, at a bad birther joke that bombed. (On the very same day Romney was opining 'fine' about the current state of big business, he apparently announced, tongue in cheek, to an audience in Michigan that he had his birth certificate —or that he didn't need one —or something like that.) "We don't need a birther-in-chief" went up the silly umbrage of an instantly produced Obama campaign ad —so avidly missing the substantive forest for the silly-ass trees. I'd much rather have seen them challenging Mitt Romney to explain what exactly he means to do about the fine mess he seems to know so well... "big business doing fine" while so many others struggle.

It might not make for loud enough political advertising copy, or serve for a pithy post for your facebook page, but as voters we are going to have to get down to the fine print as we make this decision in November. What Mitt Romney means —what Barack Obama means to do about "the private sector doing fine" or "big business doing fine" while a lot of the rest of the country still staggers and strains for a fully realized recovery, that has to be our focus —that is the substance of the decision at hand.

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