To use a baseball metaphor Mitt Romney was born on third base. Presidents Teddy Roosevelt, Franklin Delano Roosevelt and John Kennedy were all also men of privilege. Unlike Romney, they did not express a distain for nearly 50 percent of our citizens. Romney, infamously said “there are 47 percent who are who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it.”
The 47 percent are our friends, family and neighbors who are serving in the military, drawing retirement Social Security and those who are disabled. Romney, after being born on third base now seems to believe that he hit a home run because he has crossed home plate.
How did Mitt Romney make his fortune? His father, George Romney was CEO of the American Motors Corporation, governor of Michigan and U.S. Secretary of Housing and Urban Development.
When George Romney ran for president in 1968 he released 12 years of his tax records. His son has only released two years of his taxes. While we cannot find a smoking gun that reveals anything illegal, Romney’s taxes do reveal how our tax system favors those at top!
When it comes to federal and state taxes the vast majority of us pay taxes on income earned from salaries. The top 0.1 percent, like Romney, receives most of their income from investments. At the federal level, income from salary and wages can be taxed at a rate as high as 35 percent. Incomes from investments are typically taxed at a rate of 15 percent.
In 2011, Mitt Romney paid an effective tax rate of 13.6 percent. (He has not told us why he has large sums of money in offshore banks.) Warren Buffet, one of the richest men in the world, called attention to the lack of fairness in our tax code when he revealed that his tax rate was lower than his secretary.
Romney and his wife created a $20 million trust fund for each of their five sons. Because our tax law is written by the rich and for the rich they can draw down on this, tax-free, for life.
Mitt Romney was one of the founders of Bain Capital. When he left Bain his severance package let him continue sharing in the profits as if he were still a managing partner. Because he profited from their investments, as if he were an active partner, he paid taxes at a lower rate. His earnings were treated as everyday retirement income.
Bain is a private equity business. Private equity typically pools funds to takeover public companies and make them private. During the period that Romney was the CEO of Bain they pooled as little as five percent to take over companies. The rest was paid for by saddling the business with large amounts of debt.
Reviews of Bain’s leverage buyouts show that these takeovers have created giant financial problems. Frequently, businesses had to pay off their newly acquired debt and also pay Bain management fees. All too often they had to give out big bonuses to the old management in order to lubricate the transaction.
Romney touts his time at Bain as a “job creator” as a key experience qualifying him to serve as our president. To claim that companies like Bain have “job creation” as their primary mission is misleading. Bain’s main reason for being is to create profits for themselves and their investors. Their record shows that they often made money by reducing the number of workers. Bain also generated profits by creating jobs. Unfortunately, sometimes these jobs are overseas.
The Sensata Technologies factory in Freeport, Ill. will be laying off 170 workers and relocating to China. Bain gained control of the company in 2006. The Freeport workers are being forced to train their replacements - in China. Mitt Romney still owns a chunk of Sensata. According to the Washington Post, “under Romney’s leadership Bain invested in a series of firms that specialized in relocating jobs done by American workers to new facilities in low-wage countries like China and India.”
The Wall Street Journal studied 77 businesses Bain invested in while Romney was in charge from 1984 until 1999. They found that 22 percent went bankrupt, reorganized or shut down within eight years. In spite of this, Bain earned from 50 percent to 80 percent in profits for each year.
Mitt Romney likes to tout the office supply store, Staples, as an example of his skills as a job creator. He has served on their board of directors and Bain was a major investor. If under a Romney presidency Staples is our model, then we will face a very troubling future. A 2012 report lists Staples as one the 50 lowest paying businesses in the US. In 2011, their CEO made $8.8 million, a 40 percent cut from 2010. Most of their workers earn less than $10 an hour.
The gap between the top 0.1 percent and the 47 percent that Romney sees as victims or for that matter the average citizen of our country is greater than it has been since before the Great Depression. Given his record, will Romney serve the interests of the 0.1 percent or will he serve us with low paying jobs?