If you treat everything described in ordinary conversational English by an airline ticket as the same, you can get some decisions right, but for many, you need to discriminate within the broad category. Same with taxes: Mitt Romney pays sales taxes, property taxes, automobile and gasoline excise taxes on at least a pair of Cadillacs, state income taxes, airline ticket excise taxes, others I can’t think of at the moment, and federal income tax. He and his spox have meticulously said “taxes” without qualification when everyone is thinking about the last of these; today, he did it again, saying he never paid less than 13%. Even if he means “income taxes”, Massachusetts income tax is more than a third of that, and we don’t even know what denominator he’s referring to (AGI, gross income, taxable income) or whether he’s talking about his marginal rate or average.
Why has no reporter ever insisted he define his terms in this very salient conversation? It’s very simple - “Have you ever paid less than 13% of your annual gross income in federal income taxes?” – and not doing it is simply journalistic malpractice.
Author: Michael O'Hare
Professor of Public Policy at the Goldman School of Public Policy, University of California, Berkeley, Michael O'Hare was raised in New York City and trained at Harvard as an architect and structural engineer. Diverted from an honest career designing buildings by the offer of a job in which he could think about anything he wanted to and spend his time with very smart and curious young people, he fell among economists and such like, and continues to benefit from their generosity with on-the-job social science training.
He has followed the process and principles of design into "nonphysical environments" such as production processes in organizations, regulation, and information management and published a variety of research in environmental policy, government policy towards the arts, and management, with special interests in energy, facility siting, information and perceptions in public choice and work environments, and policy design. His current research is focused on transportation biofuels and their effects on global land use, food security, and international trade; regulatory policy in the face of scientific uncertainty; and, after a three-decade hiatus, on NIMBY conflicts afflicting high speed rail right-of-way and nuclear waste disposal sites. He is also a regular writer on pedagogy, especially teaching in professional education, and co-edited the "Curriculum and Case Notes" section of the Journal of Policy Analysis and Management.
Between faculty appointments at the MIT Department of Urban Studies and Planning and the John F. Kennedy School of Government at Harvard, he was director of policy analysis at the Massachusetts Executive Office of Environmental Affairs. He has had visiting appointments at Università Bocconi in Milan and the National University of Singapore and teaches regularly in the Goldman School's executive (mid-career) programs.
At GSPP, O'Hare has taught a studio course in Program and Policy Design, Arts and Cultural Policy, Public Management, the pedagogy course for graduate student instructors, Quantitative Methods, Environmental Policy, and the introduction to public policy for its undergraduate minor, which he supervises. Generally, he considers himself the school's resident expert in any subject in which there is no such thing as real expertise (a recent project concerned the governance and design of California county fairs), but is secure in the distinction of being the only faculty member with a metal lathe in his basement and a 4×5 Ebony view camera. At the moment, he would rather be making something with his hands than writing this blurb.
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Rmoney’s campaign said later that it was federal income tax [for what that source is worth]. And even this seemly clear statement does not include unrealized capital gains.
But that still leaves us with “what is his gross income?” The IRA and other dodges tax exempt a large portion, we know this from the released form.
Without tax forms we can only speculate based on the most cleaned up tax return. Even Harry Reid’s source did not see the 2002-2011 taxes Rmoney is describing. Reid’s source saw at best 2003 and earlier, when Rmoney was at Bain. The press and discussions almost always miss this.
On an earlier discussion someone mentioned that the IRA [I believe they referred to it as a 401, which it is not] will begin distribution in 2017 and be taxed at the top rate. That is naive. It will be made into a Roth. If Rmoney elected to convert to a Roth, the penalty would be the top rate of 35%, unless the top rate were to drop to say 25%, but then who is so criminal to propose that?
One might even see a one time conversion special to allow conversion to Roth at say 10%. For the year of the conversion special, a large influx of one time revenue would make that year look good for say maybe an election.
http://www.spencerlawfirm.com/Publications/Mitt-Romneys-IRA.shtml
http://www.forbes.com/sites/joshbarro/2012/01/19/why-didnt-mitt-romney-convert-his-ira/