From Dressage to Deductions, A Story of Entitlements

Definition of entitle (vt)

en·ti·tle

1. grant somebody right: to give somebody the right to have or to do something
2. give title to something: to assign a title to something such as a book
3. award somebody honor: to confer an official position or honor on somebody that brings a particular title with it

Synonyms: enable, allow, permit, authorize, sanction, warrant

I took a look at Mitt Romney’s 2011 estimated tax return. It was fun, I read and reviewed all 104 pages. The Romney’s declared almost $21,000,000 (yes that is 21 million dollars) in income, most of it “passive” meaning exempt from payroll taxes, you know, those are the taxes the rest of us pay, including that 47% Mr. Romney so cavalierly said he was unconcerned with.

We pay payroll taxes, sales taxes, real estate taxes, tax on our phone, TV, electric bills, so most of us actually pay more in taxes, as a percentage, than the Romney’s, but more importantly, the Romney’s and the Ryan’s, and most of the billionaires they insist need the tax welfare entitlement known as the Bush Tax cuts (or as I like to call them Millions for Billionaires), receive more in tax entitlements than the rest of us make in a year.

Let’s look at some of what I found in this estimated return. A few very interesting line items jumped out at me, first, the Romney’s claimed nearly $6,000,000 in deductions, meaning that is “tax-free” money.  And I have a feeling the Romney’s feel plenty entitled to THAT entitlement. What is really interesting is that nearly ½ of the deduction was claimed as a “gift” to a foundation. And the gift was appreciated stock. And the foundation that received the gift is one that the Romney’s also list as part of their financial disclosure.

So, just to make this clear, Mitt & Ann Romney bought, or were themselves the recipients, of a gift of stock. After holding the stock for a period of time (the time the stock was held was not disclosed), they “gifted” the stock to a foundation, and here is the sweet part, they receive a tax deduction for the market value of the stock (instead of cost) without paying the capital gains tax on the appreciation in the value and the Foundation receives the stock at market value, and they can then sell the stock, get the cash tax-free. And since the Romney’s are taking “distributions” from this same Foundation, the Tyler Foundation, they have basically laundered this appreciated stock into not only a charitable contribution but into a tax-free liquid asset.

And yes, this Foundation does give money to actual charities, so I am not suggesting the Romney’s did anything illegal, but when it comes to taking advantage of entitlements, the Romney’s have had their hand-outs handed to them for decades. From tax credits for her dressage horse to Federal funds that Mitt felt entitled to for the 2002 Olympics, funds for Bain to tax deductions for their 5 houses, the Romney’s are taking more in deductions than many people will make in their lifetime.

And isn’t that really the entitlement we should be putting an end to? Does someone who made $21,000,000 in interest and dividends “need” a hand-out from us? Why are we paying tax on our $50,000 when Mitt has mountains of cash stashed off-shore? It is time to return to a sane & balanced tax policy.

Once upon a time a CEO taking millions would have been arrested for embezzlement, now he is lauded as a “great” businessperson.  The private jets, luxury sport boxes, over-the-top “meetings” and business trips, it is time to rein in those entitlements. Limit the deduction for executive compensation to average employee pay. Limit deduction for travel, meals & entertainment to Federal Per Diem. Make it tax beneficial to hire more employees and tax detrimental to pay multi-millions to executives, celebrities and athletes.

Let’s stop giving millions to billionaires and deductions for dressage horses. Instead, let’s insist as a nation, as a civilized society, that we care for our Veteran’s, our ill, aged and children. Let’s invest in our infrastructure, education, health & welfare. Those are not entitlements, they are necessities. Just read the definition, and you decide which is the entitlement: tax deductions for 5 houses and a horsey, or food & medicine to keep you alive:

Definition of entitle (vt)

en·ti·tle  

1. grant somebody right: to give somebody the right to have or to do something
2. give title to something: to assign a title to something such as a book
3. award somebody honor: to confer an official position or honor on somebody that brings a particular title with it

Synonyms: enable, allow, permit, authorize, sanction, warrant