Is This Why Mitt Won't Show His Tax Returns?

[Guinevere]

And I ask again Long Run, or any Republican, how would you create jobs? What is your party's plan? What is Mitt's plan? So far, I've heard nothing but crickets....

You want to talk about issues? You want to get past general buzzwords and glib talking points? Then bring it on -- what's the plan???

[Long Run]

Bain employees, including Romney, enjoy a much richer retirement plan than most Americans. Instead of offering a 401(k) plan, in which employees set their own money aside, sometimes with a contribution from their employer, Bain funds the maximum amount it can, every year, in its employee IRAs. * * *

Under current federal limits, Bain can contribute up to 25 percent of an employee’s salary, up to an annual maximum of $50,000, to employee IRAs. * *

Do the arithmetic and show us how that works. You know arithmetic don't you?

It's a simple calculation.

yrs,
rubato

I will be happy to do it for you since you don't seem to want to perform this simple calculation yourself. It takes a 20% annual return to exceed the $20 million mark, using the $30,000 contribution rate described in this article: http://www.bloomberg.com/news/2012-07-1 ... l-ira.html (note that the $22,500 limit you refer to is for a 401(k) plan in 2012, which is a different plan with different limits from the the SEP-IRA that Bain apparently has had in place). That is, put in $30,000 per year from 1984 to 1999, earn 20% per year on the investments and by 2012, you have over $22 million. Is 20% annual average return a great performance? Certainly, but that again points to the excellence of Romney and the Bain folks at picking investments. To get to $100 million, the annual rate of return would need to be 28% (the "miracle" of compound interest). Again, these are great rates of return, but certainly conceivable for a specialized investor. Given how simple it is to do this math and understand that this result is possible, it is hard to understand why so many people keep pointing to this as an issue.

[Long Run]

And I ask again Long Run, or any Republican, how would you create jobs? What is your party's plan? What is Mitt's plan? So far, I've heard nothing but crickets....

You want to talk about issues? You want to get past general buzzwords and glib talking points? Then bring it on -- what's the plan???

First of all, I'm an "I" not an "R", though on most economic issues I am close to R's than D's on the issues. The simple answer, one, is the government does not create private sector jobs; some of its activities help to foster an environment where jobs are created (e.g., the legal system to enforce contracts, criminal system to prevent theft, allowing relative freedom of interstate commerce, and regulations such as the SEC requirements on investment disclosures); and some of its activities hinder job creation (taxation while necessary creates disincentives, regulations of various stripes create complexities and require hiring of people like you and me to figure out, etc.).

I don't think Mitt is any great shakes and his proposals so far, to the extent we can understand what they are, are mostly campaign babble. My hope, and maybe it is the same ill-fated hope I had with Obama four years ago, is that he will be a competent pragmatist that helps lead the country to reasonable solutions. At least in Mitt's case there is some past history of his pragmatism and competence, at Bain, the Olympics and as your hated governor. Obama has shown himself to be in over his head.

What do I think is needed for the recovery to take hold? We don't need a government jobs program or targeted investments. Instead, we need the government to go back to doing its core job reasonably well so that businesses can know what to expect. Create a credible long-term balanced budget plan, that includes taking on the actuarial black holes of Social Security, Medicare and Medicaid. To provide the necessary increase in revenue to go along with the necessary reduction in the rate of spending, the tax code should be reformed to increase the taxable wage base by removing deductions and credits, and by setting top marginal rates at a reasonable and competitive basis (somewhere in the range of where they are now). The main thing, though, and this has been a huge failure of Obama and Congress, is that they need to provide the certainty of what the tax code will be in the foreseeable future and they need to provide the country and world with the confidence that the deficit is being dealt with. Those uncertainties, which are within our government's ability to deal with, are the greatest drag on the economy. That's my two bits.

[Sue U]

Create a credible long-term balanced budget plan, that includes taking on the actuarial black holes of Social Security, Medicare and Medicaid.

Medicare is in (projected, not current) difficulty because it insures the uninsurable -- the oldest, sickest segment of the population. The surest way to solvency of Medicare/Medicaid is to create a single-payer national healthcare system, which can more effectively spread the risk and control costs. But the most strident and intractable opposition to such a system -- which every other industrialized nation of the world has -- comes from the Republicans. If the GOP were truly concerned about protecting medical benefits for the elderly, they would support national healthcare.

To provide the necessary increase in revenue to go along with the necessary reduction in the rate of spending, the tax code should be reformed to increase the taxable wage base by removing deductions and credits, and by setting top marginal rates at a reasonable and competitive basis (somewhere in the range of where they are now).

So you would make it harder to own a home, care for children, cover medical expenses, save for retirement, donate to charity, and do a million other things that are encouraged by tax credits, deductions, exemptions, deferrals or otherwise favorable tax treatment. (I assme you must also be in favor of eliminating the distinction between "capital gains" and ordinary income.) Two problems, though: 1) the tax code is a fairly effective vehicle for implementing public policy, encouraging certain activities and discouraging others; 2) there is no political will on the part of either party to do any kind of overhaul of the tax code, much less to be seen as advocating elimination of (e.g.) the mortgage interest deduction and "killing the American dream of home ownership," as would be widely trumpeted by any opponent in the next election cycle.

The main thing, though, and this has been a huge failure of Obama and Congress, is that they need to provide the certainty of what the tax code will be in the foreseeable future and they need to provide the country and world with the confidence that the deficit is being dealt with. Those uncertainties, which are within our government's ability to deal with, are the greatest drag on the economy. That's my two bits.

The "uncertainty" meme is mostly altogether bullshit. Business has been sitting on mountains of cash and whining about "uncertainty" as a cover for lack of leadership/imagination/entrepreneurship. What is any more uncertain about the tax code today than it was two, four, eight or twenty years ago?

[Guinevere]

The stock market doesn't seem to be feeling much "uncertainty" these days.

And btw, I said "Long Run, or any Republican" not any *other* Republican . . . .

[Long Run]

The "uncertainty" meme is mostly altogether bullshit. Business has been sitting on mountains of cash and whining about "uncertainty" as a cover for lack of leadership/imagination/entrepreneurship.

Really? Business people are dolts is the best explanation you have?

What is any more uncertain about the tax code today than it was two, four, eight or twenty years ago?

Fiscal cliff. Expiring tax provisions. Estate tax goes away for one year and then it? Really, a big part of the problem was W agreeing to a 10-year sunset of the 2001 tax provisions, rather than putting together a plan that could be enacted permanently. The belief was that Congress would eventually decide which provisions would stay permanent (only some have been given this status) and which would be adjusted. As we approached the deadline, the uncertainty grew and grows still. Now everyone is waiting on the election and the fiscal cliff deal is still the law of the land -- promising to throw us into another recession -- and the children in D.C. are waiting for the election before deciding how this is going to be resolved.

In normal times there is relative certainty as to the laws. Obviously, the tax laws can be changed at any time, but that takes a lot of political energy and overcoming the opposition makes the laws seem pretty certain. The situation over the last several years has been the opposite of this relative certainty.

[Long Run]

The stock market doesn't seem to be feeling much "uncertainty" these days.

So now the D's are pointing to investors doing well to say things are doing better, and the R's are saying its a terrible recovery because there aren't enough jobs. Almost like a Bizarro panel.

[Guinevere]

The stock market doesn't seem to be feeling much "uncertainty" these days.

So now the D's are pointing to investors doing well to say things are doing better, and the R's are saying its a terrible recovery because there aren't enough jobs. Almost like a Bizarro panel.

Except that's not what I said. For god's sake, I've been asking about jobs, jobs, jobs. YOU brought up uncertainty. Sue noted what that concept is bullshit. I supported that statement, utilizing a method the Republicans rely on all the time.

You still have not answered my initial question in a substantive way. C'mon Long Run, I expect better from you, I know you're no Mittens . . . .

[Lord Jim]

The "uncertainty"meme is mostly altogether bullshit. Business has been sitting on mountains of cash and whining about "uncertainty" as a cover for lack of leadership/imagination/entrepreneurship.

Well that's a bit facile....

What's your plan?

Well here's mine:

It's true that there's about two trillion dollars of investment capital sitting on the sidelines; and it's also true that some of that has to do with the uncertainty about taxes, regulation, healthcare costs etc...(uncertainties that have existed throughout the entire time of this Administration)

But the biggest reason this capital isn't being invested in the economy right now is lack of demand....

It simply makes no sense to invest in business expansion, when there aren't enough consumers to buy what you're producing now...

Even The Liar Krugman managed to get that much right....the problem we're facing right now is fundamentally a "demand" problem...

But the solution he (and Team Obama) suggests for how to get at this problem is completely wrong headed....

We're not going to stimulate demand in a 16 trillion dollar economy in any meaningful way by swelling the ranks of the NEA by another 100,000, or "investing" in solar panels and wind mills...

Or extending unemployment benefits indefinitely...

We need an intelligent "full court press" approach to accomplish this, by incentivizing domestic manufacturing, (and there are a variety of ways to do this, from creating tax incentives for businesses to return their manufacturing plants back to the US...ideas about which have been endorsed by politicians as far away from each other politically as Barbara Boxer and Rick Santorum... to a meaningful and realistic energy policy that would dramatically reduce the cost of energy not a hundred years from now, but within the next couple of decades...oil, shale oil, coal, natural gas, nuclear...

In Ohio alone, deposits were recently discovered that would allow us to tell the Hugo Chavez and the Mid East potentates to go screw themselves...(which would have the additional advantage of reducing our defense costs)

Unlike some of my conservative brethren, I believe there is a government role to be played here...(But let's play it intelligently, not as a payoff to government sector union hacks )

Here's an example:

A number of cities and counties are now investing in free internet service....

Let's do that on a national scale; the Dems love to point to the National Highway System as a triumph of government investment, (which it was, under a Republican President, BTW)

Let's create, in partnership with private industry, (as the Interstate Highway System was) a "National Internet Highway System"...

(Will that create more access to porno and video games than some kids had before? Sure it will ...but it will also create an access for unleashing the abilities and creative power of our society to an extent that will redound to our advantage, many times beyond the cost.)

If we're going to make major investments in "new technologies" how about we make those investments in technologies that have a proven track record, and that can produce meaningful results in a reasonable time window?

Doesn't it make a lot more sense to direct resources and incentives towards converting say, 50% of commercial road traffic to being run on natural gas, over the next 10-15 years, than it does to trying to accomplish the same objective over 50-100 years using solar panels or windmills?

Just sayin'....

On the issue of "more government regulation versus less government regulation" how about we become the party of "smart government regulation"?

A party that opposes needless government red tape that handicaps the development of small business (that creates 80% of the new jobs) but still embraces the idea of eliminating "too big to fail" in the banking industry?

The Republican Party cannot become the party of those who "want nothing from government"...

I've posted this quote before from George F. Will from a few years ago, but it really rings true:

" I was having dinner with a leading GOP activist who said that he wanted, "the Republican party to be the party of people who want nothing from government."..

I suggested to him that all the people who fell into that category, could join us at the small table at which we were dining"....

No truer words were spoken...

The Republican party cannot become the Party of those who want nothing from the government and hope to survive politically,...The Neo-Spencerian Model simply won't work, long term; or even medium term...

On the other hand, The Democratic Party and Team Obama offer nothing but a cynical class warfare payoff to their constituent groups, and no understanding of how to get us out of this fix whatsoever....

The American people deserve a better choice than this....

One party trying to claim that government has no role to play in the development of a vigorous society, and the other striving to misuse that role in ineffective ways...

[Guinevere]

Please stop calling wind turbines "wind mills." It is condescending, and couldn't be further from the truth. As for their impact on the economy, and our reduction in foreign energy, here's a clip from a study done by Illinois State about the wind energy projects in Illinois:

As of April, 2012, Illinois ranked 4th in the United States in overall installed wind capacity and ranked 14th in potential capacity. Illinois installed the second most new generation capacity amongst all states during 2011. Illinois led the nation in 2011 with 404 new turbines installed (AWEA, 2012a). Illinois currently has 42 wind projects online, which account for 3,360.28 MW of wind generating capacity. This report will analyze the economic impacts from only the projects that exceed 50 MW of capacity. Illinois has 23 projects larger than 50 MW, which account for 3,334.91 MW or 99% of the state’s wind energy generating capacity
(see Table 1). Although project specific data were used in this report, proprietary information about the wind farms will not be released. It is important that stakeholders and decision makers are educated about the economic development impact wind energy has brought to the state and local communities so that informed decisions regarding future adoption of wind energy projects can be made. By analyzing the impacts of Illinois’ wind energy, this report supplies interested parties with information concerning the economic development benefits of wind energy.
According to this economic analysis (see Figure 1), the 23 largest wind farms in Illinois:
• Created approximately 19,047 full-time equivalent jobs during construction periods with a total payroll of over $1.1 billion
• Supports approximately 814 permanent jobs in rural Illinois areas with a total annual payroll of nearly $48 million
• Supports local economies by generating $28.5 million in annual property taxes
• Generates $13 million annually in extra income for Illinois landowners who lease their land to the wind farm developer
• Will generate a total economic benefit of $5.98 billion over the life of the projects

(NB: project life is usually calculated at 20 years, although with new technology that's closer to 30)

None of which is small potatoes.

I've spent the past year tied up in litigation about wind turbine siting. It's paid *my* bills for a while (and a bunch of other lawyers, consultants, and judges), and if the project finally gets past the neighboring NIMBYs (as I expect it will - but they are another muncipality, so they don't get the benefits), it will generate close to $1MM in annual energy costs savings for my client (a municipality of 27K people with an annual budget of about $75MM) -- think about what can be done with that money (or think about it offsetting and making property tax increases smaller or less likely).

[Lord Jim]

Or maybe the American People don't deserve a better choice than this...

Pundits across the political spectrum have argued for a number of years that our system is "broken", but I think a reasonable argument to the contrary can be made...

For decades, the American people have shown in poll after poll and vote after vote, that they want the government to deliver them a wide and expanding array of services...

And in those same polls and votes, they've made just as clear that they don't want to have to pay for them...

And that is precisely what they've gotten...

Who says democracy doesn't work?

[rubato]

Bain employees, including Romney, enjoy a much richer retirement plan than most Americans. Instead of offering a 401(k) plan, in which employees set their own money aside, sometimes with a contribution from their employer, Bain funds the maximum amount it can, every year, in its employee IRAs. * * *

Under current federal limits, Bain can contribute up to 25 percent of an employee’s salary, up to an annual maximum of $50,000, to employee IRAs. * *

Do the arithmetic and show us how that works. You know arithmetic don't you?

It's a simple calculation.

yrs,
rubato

I will be happy to do it for you since you don't seem to want to perform this simple calculation yourself. It takes a 20% annual return to exceed the $20 million mark, using the $30,000 contribution rate described in this article: http://www.bloomberg.com/news/2012-07-1 ... l-ira.html (note that the $22,500 limit you refer to is for a 401(k) plan in 2012, which is a different plan with different limits from the the SEP-IRA that Bain apparently has had in place). That is, put in $30,000 per year from 1984 to 1999, earn 20% per year on the investments and by 2012, you have over $22 million. Is 20% annual average return a great performance? Certainly, but that again points to the excellence of Romney and the Bain folks at picking investments. To get to $100 million, the annual rate of return would need to be 28% (the "miracle" of compound interest). Again, these are great rates of return, but certainly conceivable for a specialized investor. Given how simple it is to do this math and understand that this result is possible, it is hard to understand why so many people keep pointing to this as an issue.

Now all you have to do is show that his investments actually made 20%, every year for 15 years! continuously!, and you have the beginnings of an answer. Because if he made less than 20% the numbers don't work and Mitty is a liar.

Most of the business press said he didn't. And most of them said that no one does that.



Keep trying.

"Again, these are great rates of return, but certainly conceivable for a specialized investor. Given how simple it is to do this math and understand that this result is possible, it is hard to understand why so many people keep pointing to this as an issue. "

Even the R-W business press thinks this is hogwash. Pure shit. No one makes 20%+ for 15 years.

yrs,
rubato

[Crackpot]

He did it by using his magic underwear!

[Lord Jim]

Please stop calling wind turbines "wind mills."

Okay, I stand corrected...

We're not going to stimulate demand in a 16 trillion dollar economy in any meaningful way by swelling the ranks of the NEA by another 100,000, or "investing" in solar panels and wind mills turbines...

[Lord Jim]

Oh gee, I wasn't paying enough attention to this thread to notice that Wrong Way was attempting to commit math:

Do the arithmetic and show us how that works. You know arithmetic don't you?

It's always such a hoot when he tries to do that...

Why don't you give it a shot rube? Impress us....

viewtopic.php?f=4&t=7131&p=88308&hilit=wow#p88308

[rubato]

Actually those (fanciful) numbers don't work at all.

With $30,000 invested per year and a 20% annual investment gain it would take 26 years to reach $20,000,000 .

year ………. net invested ………. annual investment gain (20%)
0 ………. $30,000 ………. $6,000
1 ………. $66,000 ………. $13,200
2 ………. $109,200 ………. $21,840
3 ………. $161,040 ………. $32,208
4 ………. $223,248 ………. $44,650
5 ………. $297,898 ………. $59,580
6 ………. $387,477 ………. $77,495
7 ………. $494,973 ………. $98,995
8 ………. $623,967 ………. $124,793
9 ………. $778,760 ………. $155,752
10 ………. $964,513 ………. $192,903
11 ………. $1,187,415 ………. $237,483
12 ………. $1,454,898 ………. $290,980
13 ………. $1,775,878 ………. $355,176
14 ………. $2,161,053 ………. $432,211
15 ………. $2,623,264 ………. $524,653
16 ………. $3,177,917 ………. $635,583
17 ………. $3,843,500 ………. $768,700
18 ………. $4,642,200 ………. $928,440
19 ………. $5,600,640 ………. $1,120,128
20 ………. $6,750,768 ………. $1,350,154
21 ………. $8,130,922 ………. $1,626,184
22 ………. $9,787,106 ………. $1,957,421
23 ………. $11,774,527 ………. $2,354,905
24 ………. $14,159,432 ………. $2,831,886
25 ………. $17,021,319 ………. $3,404,264
26 ………. $20,455,583 ………. $4,091,117


What the article actually SAID is that Bain might have valued stock and other equities below their actual value which was put into the sep-ira. Which would be illegal. Or that he 'magically' only bought assets which increased by miraculous amounts (and never bought any losers).

Mitty is a cheat and a crook. That's why he won't release his tax returns.


And once again we see that no Republicans present care enough about the facts to check them for themselves.

Like Michael Shermer said; many people form beliefs first and then distort the facts to fit them.

yrs,
rubato

[Lord Jim]

And once again we see that no Republicans present care enough about the facts to check them for themselves.

Well, I cared enough about facts to nail your sorry ass once again on that Fractured Fairytale about the Clinton years you keep trying to peddle...

viewtopic.php?f=3&t=7392&p=91442&hilit=bullshit#p91442

Rube, you wouldn't know a "fact" if it fell out of the sky, landed on your face, and started to wiggle....

[Long Run]

With $30,000 invested per year and a 20% annual investment gain it would take 26 years to reach $20,000,000 .

Starting year = 1984, year that it reaches $20 million = 2012. 2012 minus 1984 = 28 years.

Bain might have valued stock and other equities below their actual value

Again, an unsubstantiated claim.

Now all you have to do is show that his investments actually made 20%, every year for 15 years! continuously!,

Actually, those making these unfounded allegations need to show the opposite. And as noted, it is not 15 years, it is 28 years that the first dollars were invested. And anyone familiar with investments would know that he would have years that far exceed 20% return and years when he had less than that; that's how risky portfolios work.

As for 20% being unachievable, he could have invested in Apple in the 2000s and made 44% annual return each year. And in 80s and 90s, there were a whole bunch of high flying stocks; heck since 1980, something as banal as Coca Cola returned over 16% per year, helping make Warren Buffett appear the genius he is today.

And anyone familiar with VC funds can tell you that it is common for the better VC funds to make 20% annual returns -- they get in on the front end of deals, pick a few mega-winners, a handful of okay performers, and a group of companies that don't make it. Typical investors don't get to invest in these things because they are risky and illiquid; only high net worth individuals and institutions are allowed by law to make these type of investments. Actually, it would be a disappointment if Romney's VC investments didn't make 20% or more per year because that would indicate he was not very good at his job.

[rubato]

'...

And anyone familiar with VC funds can tell you that it is common for the better VC funds to make 20% annual returns -- they get in on the front end of deals, pick a few mega-winners, a handful of okay performers, and a group of companies that don't make it. Typical investors don't get to invest in these things because they are risky and illiquid; only high net worth individuals and institutions are allowed by law to make these type of investments. Actually, it would be a disappointment if Romney's VC investments didn't make 20% or more per year because that would indicate he was not very good at his job.

Show me the data which says that the 'better VC funds' make 20% EVERY YEAR for over 20 years.

More fantasy logic.

Warren Buffet is smarter than Mitty and his net does not double every 4 years (which is mathematically necessary with that return).


yrs,
rubato

[Long Run]

On page 5 you can see the average VC return is above 18% over the last 25 year paid to the limited partners (i.e., after fees): http://www.cambridgeassociates.com/pdf/ ... 0Index.pdf Hence, investors in above average VCs do better, often much better, than 18%.

My last thought on this topic is that venture capital is a manager selection problem. If you'd been in the top quartile over the entire period [he is looking at the period 1981 to 2003], including the ugly years, the average Net to LPs IRR is about 25%, about twice the median return.

http://www.avc.com/a_vc/2007/11/venture-fund--3.html (from a VC manager)