Thursday, August 09, 2012

Someone said something stupid on the internets (and unfortunately it was me)

I am currently on vacation in Costa Rica, with somewhat spotty Internet access but communicating by email with the States.  Several reporters have contacted me, to discuss issues such as the Romney tax returns, and yesterday I was in contact with people representing Erin Burnett at CNN regarding a Huffington Post article by Ed Kleinbard and Peter Canellos a couple of days ago, concerning Mitt Romney's tax returns and attitude towards tax planning.

They criticized him with respect to Romney's role in 1994, on the Marriott board, concerning the company's decision to invest in a Son-of-BOSS tax shelter.

I've been in a sense uneasy about my Romney commentary over the months, despite 100% standing by it, for the following reason.  I regard myself as a straight shooter, not a player in the game.  I am opposed to Romney in the 2012 election (and I must say that I increasingly find myself, to my surprise, regarding him extremely negatively).  But since this is in large part policy-based - although also reflecting what I see as his evasiveness and rank dishonesty - I feel as if it's all too convenient for me to find myself also criticizing his tax return behavior, as well as the secrecy that I consider a slap in the face to basic political principles of transparency and disclosure.  But again, it's convenient to denounce all this stuff, given the political disagreement part, and I have always had an over-active conscience.  (I can feel guilty when I am entirely innocent.)

I thus feel a need to dial it back occasionally, and to bend over backwards to be fair (e.g., with regard to the significance of his possibly having needed to file for an amnesty program in re. his Swiss bank account).  I want not only others but myself to perceive me as being scrupulously fair.

Anyway, I was dismayed to have it brought to my attention that I have apparently been quoted at CNN as saying that, although Son-of-BOSS has become iconic as the most infamous abusive tax shelter in U.S. tax history, at the time (1994) perhaps its status was ambiguous.

The worst thing about this quote is that it's accurate and in context on CNN's part.  But it's not factually correct about Son-of-BOSS even back then, and it's not what I actually believe.  I was just bending over backwards to be fair and not too partisan, given that I don't know a lot of details about Romney's degree of involvement in and responsibility for what Marriott did in 1994.  So I felt uneasy about blaming him too much or considering it too indicative of who he is (although it fits the narrative pretty darned well), without my first knowing more.

So I hereby retract what I was accurately quoted as saying.  Even in 1994, no competent tax lawyer could in good faith have believed that Son-of-BOSS worked (although this may not have been obvious to anyone who was not a tax expert), and while I still don't know enough to fully judge his true role in all this, I would say that, if he was actively involved and competently advised, it would, in my view, have shown disgusting and immoral behavior on his part.  (Plus there would be no reason to think that he has subsequently thought better of it.)  But the predicates remain uncertain, at least to me.

Given what we still don't know, it's all the more important to see 10 previous years of tax returns.  After all, 1997 through 2001 or so was the high water mark of people like him investing in abusive tax shelters that sent a lot of the promoters to jail.  Did Romney, on his own tax return, invest in Son-of-BOSS and other abusive tax shelters, such as CDS (which is hinted at by his 2010 return), back in the day?

Lots of other experts keep on saying he was too smart to do this rotten stuff and thus must have paid some income tax each year.  But, despite the uncertainty that he himself has created through his actions, I sure wouldn't bet the house on their being right.

5 comments:

Eric Rasmusen said...

"Given what we still don't know, it's all the more important to see 10 previous years of tax returns. After all, 1997 through 2001 or so was the high water mark of people like him investing in abusive tax shelters that sent a lot of the promoters to jail."

"People like him"? Are you saying that we should presumptively believe that rich people cheat on their taxes?

Also,I'm afraid your math has slipped. Ten years of tax returns is 2002-2011, missing your Era of Tax Shelters. As in Home Concrete, you need to inflate your statute of limitations.

Daniel Shaviro said...

If I recall grade school arithmetic correctly, 10 years back from 2010 (already released) would bring us to 2000, well within the period I noted.

The Dismal Political Economist said...

Very good analysis. As you may know James Stewart did a nice piece on the NYT on whether or not it was possible to pay no taxes at the Romney level, and if so how one could do it.

Here is a comment on the Stewart piece which concludes that Mr. Romney was greedy enough and arrogant enough to use tax shelters and foreign accounts and believe he could get away with doing that and still run for President.

http://dismalpoliticaleconomist.blogspot.com/b/post-preview?token=l-NVFzkBAAA.-SAp7FcSXQSiSvZX2_J_jw.NMaRFqErjHYBY-JknJR_eg&postId=4237572494290142273&type=POST

The Dismal Political Economist said...

Corrected link,

http://dismalpoliticaleconomist.blogspot.com/2012/08/explaining-mitt-romneys-taxes-as-best.html

Sorry

Teresa Dondlinger Trissell said...

I admire the graceful way you addressed the accurate but misleading quote. Also, thank you for the link to patwig's blog; her shirt quilts are gorgeous and inspiring.