Election Day 2012 - Final Thoughts

Today is the final day in an election cycle that has gone on far too long. I began following things back in fall of 2011, when I was curious what the various Republican primary candidates had to say for themselves. I offered an open mind that perhaps they could sway me to vote for them. Now that we're on election day - and I genuinely have no idea who is going to win, with close polls on pretty much all sources - it seems like a good idea to collect my general thoughts on this election.

Here's the thing. I am a fan of Barack Obama's. I've read both of his books and voted for him in 2008. I genuinely like the guy. By and large, I agree with the policies that he's tried to implement, though I continue to be a little concerned about his expanded use of drones and assassinations, but no more concerned than I was about the previous administration's willingness to send troops into harm's way. There's no good way to conduct violent action against the nation's enemies.

The Republican Primaries

Still, just because I like Barack Obama, however, doesn't mean that I necessarily think he's done a bang-up job. He's certainly not the failure that the Republicans have painted him to be, but neither is he a particularly adept leader. He wasted his first two years trying to generate a consensus with Republicans, when it should have been extremely clear that they'd have none of it. There's nothing in his background which shows that he's got any particular skills at financial matters or general organization, and there are ample aspects of the way the government's run over the last four years that can legitimately be called into question.

So I began watching the Republican primary and it quickly became clear that only a couple of those lunatics had any chance of winning against Obama: either Mitt Romney or John Huntsman. Everyone else was just too extreme and would have no real chance of convincing moderates like me to vote for them. In fact, the extremism being displayed even prompted me to start the Vast Middle-Wing Conspiracy page on Facebook.

Romney himself recognized this, in the famous "47%" video that surfaced a while back and which I've discussed previously. In that video, he went on to talk about independents, in a way that demonstrated much more awareness of the realities of the electorate than the 47% part of the talk did:

Those people I told you—the 5 to 6 or 7 percent that we have to bring onto our side—they all voted for Barack Obama four years ago. So, and by the way, when you say to them, "Do you think Barack Obama is a failure?" they overwhelmingly say no. They like him. But when you say, "Are you disappointed that his policies haven't worked?" they say yes. And because they voted for him, they don't want to be told that they were wrong, that he's a bad guy, that he did bad things, that he's corrupt. Those people that we have to get, they want to believe they did the right thing, but he just wasn't up to the task. They love the phrase that he's "over his head." But if we're—but we, but you see, you and I, we spend our day with Republicans. We spend our days with people who agree with us. And these people are people who voted for him and don't agree with us. And so the things that animate us are not the things that animate them. And the best success I have at speaking with those people is saying, you know, the president has been a disappointment. 

So, basically, this tactic worked very early on with me. I conceded that Barack Obama was a bit of a disappointment and allowed the possibility of supporting a different candidate. And, thankfully, the Republicans offered up one of the two sane options from their primary. So now it became a case of asking whether Mitt was a better choice than Obama.

The Case for Either

First, let me get this prediction out of the way: Regardless of who is elected, I believe that the economy will do better in 2013 than it did in 2012. We are on an upswing. If Obama is re-elected, then he'll claim that his policies caused it. If Romney is elected, he'll claim that Obama's policies were a failure and it's his policies that caused the recovery.

In my view, the economy was so bad that it's bound to begin improving. The big question is not who will cause it to improve, but rather which policies are best to be in place when it does improve. Do you want a regulation-free, very corporation-friendly set of Republican policies in place or greater access to healthcare? A somewhat lukewarm relationship with Israel or a U.S. that seems willing to goad Israel into military conflict with Iran, somehow in the interests of "peace?"

On the single most important issue for me - American education policy - Republicans and Democrats are pretty much in lockstep these days, with a heavy emphasis on school choice in both camps.

The Case for Mr. Romney

Though I voted for Obama, I don't agree with many of his supporters that Romney is a rampaging conservative monstrosity that will destroy our country. As Newt Gingrich said during the Republican primaries, Romney is a "Massachusetts moderate" and that's his saving grace. Honestly, Romney is something of a geek. A money geek. A policy geek.

He himself seems to resent, on at least some level, the fact that he hasn't been able to focus on his intellectual policy arguments. In the leaked video from last spring, he said:

Well, I wrote a book that lays out my view for what has to happen in the country, and people who are fascinated by policy will read the book. We have a website that lays out white papers on a whole series of issues that I care about. I have to tell you, I don't think this will have a significant impact on my electability. I wish it did. I think our ads will have a much bigger impact. I think the debates will have a big impact…My dad used to say, "Being right early is not good in politics." And in a setting like this, a highly intellectual subject—discussion on a whole series of important topics typically doesn't win elections.

I didn't actually read Romney's book, but I did read his jobs plan. Though it over-simplifies things and places blame for dwindling jobs squarely on Obama's shoulders without providing the larger context of where the economy was at when Obama stepped in, the plan itself isn't half bad. Nor, frankly, is it that aggressively conservative. Despite the deeply anti-government rhetoric of the Republican primary and subsequent campaign, the jobs plan itself includes such near-socialist gems as:

Government has a role to play in innovation in the energy industry. History shows that the United States has moved forward in astonishing ways thanks to national investment in basic research and advanced technology.

There is a place for government investment when time horizons are too long, risks too high, and rewards too uncertain to attract private capital.

The above quotes make it clear that, at least in this policy statement, Romney understands the critical role government must play in scientific research. The emphasis of his plan is on "long-term" economic recovery, so if this understanding is genuine then we can expect a Romney administration to recognize these funding needs and to back them up with money.

Also, Romney implemented the Massachusetts healthcare plan. When repealing Obamacare, he can't just leave people without a replacement, so he's going to have to move forward on some sort of policies that will help insure people with pre-existing conditions are eligible at somewhat affordable rates. When he outlines the list of points that need to be included in his healthcare plan, it actually sounds remarkably like Obamacare.

In some ways, a moderate Romney has a lot of potential advantages. The Republicans would presumably cooperate with him more than they have with Obama, which means that Congress could return to actually doing something. Democrats don't quite have the backbone to completely hamstring a president for 4 years solid, to throw the entire country under the bus for political advantage, so they'll grouse a bit but will finally cooperate with a Romney administration as well. Honestly, just having a Congress that's able to do anything will be such a change that it might improve the morale of the country..

Of course, this argument is all founded on the idea that Romney is able to govern as a "Massachusetts moderate" ... but that's certainly not how he's campaigned. And that, ultimately, is why I voted against him.

The Case Against Mitt

Since I like Obama, Romney really had to make a pretty strong case to get me to switch support to him. I was still giving him the benefit of the doubt into the debates, although I was not impressed with much of what I'd seen.

For the last four years, I've watched the Republicans steamroll over the President of the United States. The President's biggest leadership failure has been his inability to win over any significant Republican cooperation on any issue. So the big question for me was whether Romney would be able to stand up to his own party.

Unfortunately, absolutely nothing during Romney's campaign showed me that this would happen. He chose Tea Party favorite Paul Ryan as his running mate. Better than Michelle Bachmann, to be sure, but still far too ideologically conservative for my tastes. When Rush Limbaugh called a college girl a "slut," Romney didn't condemn it, he just said he wouldn't have used those words. (Of course not, he's a Mormon!)

Time and time again, Romney has refused to stand up confidently against the extreme elements of his party. I have seen no evidence that a Romney administration would fight for anything that I value in the face of his party's interests.

There may well be a Mitt Romney somewhere in there who will be a great president, one that I will admire. So far, I haven't really seen it. If elected, though, I do hope he shows up to lead the nation.

If Romney is elected, I hope he does such a fine job that in 2016 there is no question about who I'm going to support.

And if Obama is re-elected ... then I really hope the 2016 primary season is a lot shorter than this one was, because I don't think I can deal with this level of crazy from both parties.

• Salt Lake Tribune: Too Many Mitts
• Facebook: The Vast Middle-Wing Conspiracy

I Am the 47%

I haven't been on Facebook yet today, but I can only imagine that the subject line of this blog post has become cliched even moments after I thought of it. Alas, there's nothing new under the sun.

And that includes Mitt Romney sticking his foot in it, which seems to be a pretty regular event. The latest kerfuffle is over his comments back at a spring fundraiser with wealthy donors, where he was caught on hidden camera saying:

There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the 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. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax. 

[M]y job is is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives.

So let's do a little personal case study of someone who falls in this 47%, voted for Obama and, according to Romney, cannot be convinced to "take personal responsibility."

My 47% Street Cred

To be honest, it would be more appropriate to say "I was the 47%" because in 2011 I actually did pay 1.12% in federal income taxes, on top of the state income taxes (4.37%) and federal payroll taxes. However, for several years before that, I was not paying income taxes:

• 2010: 0.00%
• 2009: -0.85%
• 2008: (can't find, but it was 0% or very near 0%)
• 2007: 10.37%

So, what happened in 2008 that caused my taxes to drop so much? My income from my day job has increased every year. Well, there were actually several different factors that figured into the low tax rate, all of which can be traced back to 2008:

• I got married.
• I became a stepfather.
• I began donating 10% of my income to charity and local churches (and itemizing deductions accordingly).
• I became a landlord. (My wife's previous home became a rental property.)
• I learned about the pro-business tax code and began intensely keeping records and making use of deductions to legitimately reduce my taxable business income from freelance writing.
• My wife returned to college.

Oh, yes, a couple of other things happened in 2008 that should have raised my total income tax:

• I started writing String Theory For Dummies, which resulted in a net income increase, so actually raised my gross business income for 2008 and 2009 both.
• I received an greater-than-10% raise, due to restructuring at work and them realizing that they were seriously underpaying me.

Ah, yes, and I finished my Master's Degree, paid for by reimbursement from my company (so I couldn't deduct any significant amount of it). No real bearing on my tax situation ... although it might have some bearing on that whole "personal responsibility" line.

Who Made Me Dependent Upon the State?

So the driving forces behind my sudden drop in income tax liability were primarily the following (in no particular order, since I don't feel like looking through old tax forms to figure which benefited me most):

• Small business tax deductions and credits
• Married filing jointly status
• Kid-related deductions and credits
• Rental property depreciation deduction
• Itemized deductions: Charitable (and church) donation and mortgage
• Education deductions for my wife

A quick look at this list really makes one wonder which of these deductions Mitt Romney is planning to revoke or reduce in order to wean me off of my "entitlement" mentality.

In fact, aren't these precisely the sorts of things that Republicans typically argue should reduce your tax liability even more? Isn't it really the Republicans who have decreased taxability so severely that it took me 3 years of raises and working on my writing career to work my way up to 1% income tax? Does anyone else recall Mitt Romney re-affirming his right to reduce his tax liability to the legal limits, when it was released that he way paying 15% in taxes?

Note to the IRS:

I said "legal limits."

I am very careful with my deductions and record-keeping.

If a deduction is questionable, I don't take it.

So, really, it would be a waste of time to audit me.

A waste of my time and yours.

Keep up the good work, guys!

According to Mitt Romney, this places me in a very unenviable position. I am now counted among those "who are dependent upon government, who believe that they are victims, who believe the 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."

I will concede that I am probably at the top of the 47% of which Mitt Romney speaks. While he doesn't care about most of them, he maybe cares a little bit about what I think. See, I'm one of these moderates who voted for Obama in 2008 and wishes his policies had done better. And I am giving Mitt Romney the chance to convince me that his policies will do better, so that I can vote for him today.

However, we've seen the results of his policies. His policies removed my tax liability. His policies have, apparently, turned me into a entitlement-seeking person, unable to take care of my own life, let alone the lives of the two children tragically entrusted to my care by the vagaries of fortune and chance! Those poor children! How will they suffer, to be raised by a father with so little self worth?

I dare ask, is there any solution?

Yes, I believe there is ...

I Need to Be Taxed More ... and So Do the 53% Above Me

It's totally absurd, with the amount of income I bring in, that I am paying only 1% income tax. I'm not wealthy, by any stretch of the imagination. (Well, unless you compare me to the 95% or so of the world that makes less income than I do ... in which case I'm doing alright.) I have to crimp and save just like anyone else, and there's never quite enough to do everything I want.

However, I also have two kids. I'm a member of a community and a nation. And we're overspending. To fix that, we need to do what any businessman in that room with Mitt Romney would do if faced with a tough personal or corporate budget. They would figure out how to:

• Increase revenue
• Cut expenses

We've let taxes drop too low and they need to go up a bit on the middle class. Not a lot, but at least a bit. Cap some deductions, such as the charitable deduction. Either an absolute cap or as a percentage of income. There are a lot of options here.

But to set the country on a course to fix the deficit, taxes have got to go up. Mitt Romney has made a pledge not to raise taxes. I'm hoping that he's a good enough businessman to know that he was lying when he made that pledge, because there's no way he can be serious about the deficit while clinging to it.

Of course, there is a third option that the businessmen in that room may be familiar with, especially if Trump was there. It's an option I unfortunately had to exercise in 2006. It's one that isn't fun and, as a patriotic American, it's one I hope we can avoid:

Bankruptcy.

Update:
Sept. 26: I found out about the blog We Are the 47%, which shares open letters (ostensibly to Romney) about individual experiences within the 47%. Here's an overview of some of the people who have stepped forward through that website:

We have letters from a Pulitzer Prize-winner in fiction and a Pulitzer Prize-winning columnist, as well as an 82nd Airborne paratrooper, a recipient of a Purple Heart, the wife of a med student, a special education teacher, a union carpenter... We have letters from those who share Mitt Romney's faith, but disagree with his disregard for the 47 percent; and we have a letter from someone who, like Romney, graduated from Harvard Law School, but, unlike Romney, made the financial sacrifice to work as a public defender ...

Corporations: People, Entities, or a Hybrid of Both?

Many liberals have made a lot out of the Citizens United decision by the Supreme Court, which they describe as saying "corporations are people." However, the Supreme Court ruling doesn't actually use this terminology, even if the spirit of the ruling does imply that .

Still, one of the major elements of the campaign is the degree to which corporations deserve special considerations and what types of considerations those are. While both political sides of the debate tackle this argument with a lot of preconceptions, I think it's possible to really look at the facts behind how corporations are formed to understand the degree to which a corporation, in general, can be viewed as equivalent to an individual.

Mitt Romney's Evolving View of Corporate Personhood

Mitt Romney did use these words on the campaign trail during the Republican primary, when he replied to a critic at an event, "Corporations are people, my friend." He has been very vocal about his strong beliefs regarding the importance of corporate rights. I'm in the process of reading Romney's jobs plan, Believe in America: Mitt Romney's Plan for Jobs and Economic Growth (available on the Kindle). In it, he (or his team, at least) says the following:

The truth is, as Mitt Romney likes to say, "corporations are people." They represent human beings acting cooperatively to be economically productive.

In the e-book, Scott McNealy, the founder and former CEO of Sun Microsystems, writes a piece about tax policy that delves even more deeply into the "corporations are people" narrative.

To the vast majority of Americans who have held real jobs in the real economy, often in corporations, the point made perfect sense. Indeed, it seemed a statement of the obvious. A corporation, after all, is nothing more than people who have joined together to work cooperatively. The word "corporation" itself means "body of people." And in fact, corporations consist of two groups of "people": employees and shareholders. The former work hard to make a profit and earn their salaries and benefits. The latter, now widely dispersed across the economy by means of mutual funds and retirement-plan investment portfolios, provide the capital and can reap the financial benefits while also assuming the financial risk.

However, today I was listening to the radio and heard an intriguing segment about the latest campaign kerfluffle. I've been busy with work (at a corporation) and haven't kept up with the news, so didn't know much about the outsourcing that Obama has been accusing Romney of. Apparently, Bain Capital is accused of outsourcing some jobs, and this seems to be during a nebulous time between 1999 (when Romney stepped aside at Bain to run the Salt Lake City Olympics) and 2002, when he was still listed as CEO, President, and sole owner of Bain Capital, but wasn't actively involved in the day-to-day operations. Apparently, in response, Romney said:

"Well, I was the owner of an entity that is filing that information, but I had no role whatsoever in the management of Bain Capital after February of 1999," he told CNN. "Not that that would have been a problem to have said that I was with the firm beyond that, but I simply wasn't."

Since I had just been reading the jobs plan, the use of the word "entity" struck me as odd. So which is it? Is a corporation a person or some other type of entity?

The Benefits of Incorporating

To really understand this question, we have to consider the reasons why people incorporate their businesses. For example, in addition to my day job, I am self-employed as a freelance writer. I am not incorporated, however, and file taxes on my business as a sole proprietor of a business, The Philosopher's Stone.

As a  sole proprietor, my business is treated as an extension of me as a person. Though I have an Employer Identification Number (EIN) to file payroll taxes (my wife is my salaried employee), I have not been able to us this EIN to gain business credit cards or financing. When I set up my business checking account, I tried to use my EIN and was told that since I wasn't incorporated, I needed to set it up with my Social Security Number. When I fill out W-9 forms, the documentation says that the IRS prefers sole proprietorships to use my Social Security Number instead of my EIN. Since I am not incorporated, the credit cards I use for business expenses are in my own name, not in the name of my business.

When you begin to investigate home-business tax savings, you do find that there are a number of reasons to incorporate.

1. Credit Benefits:The first reason to incorporate, as hinted at above, is that you can now begin establishing lines of credit and bank accounts using your business' EIN instead of your personal Social Security Number. If your personal credit is poor - perhaps due to a failed business or personal bankruptcy in the past - this can be a crucial benefit to gain the necessary financing for your business venture.
   
   
2. Liability Protection:Related to the access to credit, corporations also create a level of liability protection. If a sole proprietorship goes under, all of the debt is in your name, so your creditors are able to come after your individual assets. You could lose not only your business, but also your house, your savings, garnishments against future wages, and so on. When you incorporate, a very powerful legal wall is built between these two entities. This is how people like Donald Trump can have multiple major corporate bankruptcies while maintaining their personal wealth. Even if the corporation is sued for some sort of illegal business activity and loses, the fact that it's a corporation can sometimes still protect the individual from having their personal assets garnished ... or vice versa.
   
   
3. Tax Benefits: And, of course, there are tax benefits to being a corporation. Even as a sole proprietorship, I'm in the advantageous situation where my business income is taxed after expenses, in contrast to my personal income, which is taxed before expenses. Corporations have all sorts of tax loopholes created (we hope) with the genuine desire to enhance the ability of these corporations to grow their business and become economically prosperous, thus generating overall more wealth (and, ultimately, tax revenue).

The exact nature and degree of the benefits change depending upon the type of incorporation, of course, and I'm sure that there are many other benefits beyond these. Still, one glance at these reasons makes it clear that the point of incorporating is to separate the business activity from the individual.

Are Corporations People?

Taking all of this into consideration really calls into question the "corporations are people" narrative, which Romney has chosen to officially embrace on the campaign trail and in his jobs plan. While it is certainly true to say that a corporation involves "human beings acting cooperatively to be economically productive," this description by itself isn't particularly helpful. For example, the mob, street gangs, and a team of bank robbers are all attempting to "act cooperatively to be economically productive" as well! Certainly corporations are something different.

No, saying that a corporation is " nothing more than people who have joined together to work cooperatively" (as Scott McNealy does) is a gross over-simplification. I think of it more like this:

A corporation is a group of people who have jointed together to work cooperatively for economic advantage and have then asked the government for special dispensation to treat their group activity as distinctly (and legally) different from their personal activity.

The whole point of incorporation is that it provides a powerful division between the business and the personal activities. Saying that "corporations are people" requires completely ignoring the legal meaning of a corporation ... and negating the validity of the legal protections that corporation-hood confers.

This is why as soon as Romney was called into question on the activity of his corporation, he fell back on the true definition of a corporation. A corporation was no longer a noble reflection of the people united for economic productivity, but instead just an "entity" that files paperwork. His name happened to be on the line that said he was CEO, but that doesn't mean anything at all.