Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires. ― John Steinbeck
You’re not supposed to grow up in America; you’re supposed to consume. — Lester Bangs
The narrative, substance, and full import of the 2012 US Presidential Election can be summed up not in one meme, or even speech, or even, God forbid, an actual policy initiative. Instead, it can be summed up by one living creature: Ann Romney’s horse Rafalca.
It’s not that anyone in America really begrudges the rich their right to amass a fortune of over $250 million, as Mitt Romney has, or to spend some of that money entertaining his wife of 43 years. Most of us wish we had that kind of money, and if we did, we’d all blow a portion of it on something equally frivolous. It’s the capitalist way.
What is not so easy to understand, and what really symbolizes this election, is that Mitt and Ann also claimed a $77,000 tax loss on the animal.
This was originally reported as a “tax break” or a “tax credit,” which is a scurrilous lie. It’s unfair to claim that the US government will give Mitt $77,000 for owning a horse. In fact, they’ll just let him keep $77,000 he would normally give them, money which goes to helping maintain the infrastructure, general welfare, and defense of the United States. Because of his dancing horse.
Rafalca is a dressage horse, one which competed in this year’s London Olympics. Dressage is a sport where riders teach their horses to dance, and while you may well wonder why that’s considered an embodiment of the Olympian ideal, the fact is that there’s not many other places for a dressage horse to shine. Dressage is not a sport of purses. It makes no income for the Romneys. Yet under Reg. 1.183-1(c)(1)(i) of the tax code, they wrote off $77K for the feeding and care of Rafalca in 2010. They couldn’t claim that money in the same year, but at some point — perhaps this year, perhaps in Mitt’s first term or Barack Obama’s second – they will. Rafalca, which brings in no money, is registered as a business under Mitt and Ann’s Rob Rom Enterprises. As such, it posted a loss of $77,000. Money which will now stay in their pocket.
It gets weirder. Dressage is considered elitist by many, because someone in a top hat and jodphurs making a horse dance is the kind of hobby not many of us can afford. You can, however, get a bargain-basement dressage horse starting at $5,000, and a good one for twice that. (Rafalca is valued at considerably higher than that, perhaps as much as half a million.) Dressage horses cost, on average, about $10,000 a year to maintain. By the most exorbitant possible standards, the best dressage horse should only cost $50,000 to feed, house, maintain, and, um, dress.
The Romneys claim that and a third more. Even though they only own a third stake in the animal. Which means that actual feeding and care would have to run somewhere in the $240,000 range. And under those current Draconian US tax laws the .01 percenters are always labeling “socialism,” Mitt and Ann can, at some point in the next seven years, claim it again.
Meanwhile, Mitt’s Presidential opponent, afraid to even consider killing the Bush-era tax cuts until the economy somehow improves, gets sneered at for his now-famous “You Didn’t Build That” speech. For a while, it seemed as if that four-word phrase might be fashioned by the GOP into the same political albatross as John Kerry’s “Terrorists are a nuisance” pseudo-gaffe or Al Gore’s “I invented the Internet” one: a quote taken completely out of context to portray the speaker as dangerously out of touch with reality. Here, if you’ve never seen it, is the full quote:
There are a lot of wealthy, successful Americans who agree with me — because they want to give something back. They know they didn’t — look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there. (Applause.)
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.
The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. There are some things, just like fighting fires, we don’t do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires.
So we say to ourselves, ever since the founding of this country, you know what, there are some things we do better together. That’s how we funded the GI Bill. That’s how we created the middle class. That’s how we built the Golden Gate Bridge or the Hoover Dam. That’s how we invented the Internet. That’s how we sent a man to the moon. We rise or fall together as one nation and as one people, and that’s the reason I’m running for President — because I still believe in that idea. You’re not on your own, we’re in this together.
“You Didn’t Build That” never caught on outside the Republican base, mainly because that aforementioned Internet has made it very easy for individual citizens to do the actual fact-checking the corporate-owned media has given up on. But taken with Rafalca’s writeoff, both incidents neatly GPS the ideological crossroads at which America finds itself. There’s a rich strain of individualism and community, of government regulation and private enterprise running through American history, but these days, the conservative right forces you, in lieu of actual debate, to choose one or the other.
Mitt Romney, however, did not Build That. He inherited his startup wealth from his father, George, who was Governor of Michigan. George grew up receiving government “relief” after his family lost everything in the Depression of the early 1920s. George himself, who was educated in public schools, worked hard and built at least one business before losing that in the more famous Great Depression. Afterwards, he followed his father-in-law to the dreaded Washington D.C., where he worked as a stenographer for the government — specifically, a Democratic Senator. He worked hard as a salesman at Alcoa aluminum, then actually went to work for FDR’s National Recovery Administration before using his connections to become the head of the auto industry’s powerful lobbying arm. Taking over AMC, he made it a major success, rivaling the Big Three auto companies and making his fortune on stock options — in other words, help from investors.
And yet, perhaps realizing he didn’t Build That by himself, he gave back. Despite being a Republican, George served as Richard Nixon’s Secretary of Housing and Urban Development, a government agency using taxpayer money “to increase homeownership [and] support community development.” And most tellingly, he stalled initially on releasing his tax returns when he ran for Governor, also figuring it was no one’s business. Then he decided to release them anyway, showing the world that he’d not only given 23% of his fortune back to the Mormon church which had supported him as a young missionary, but paid the Feds back fully half of his income.
How about Romney’s VP pick, Paul Ryan, that firebrand and intellectual icon of Tea Party libertarianism? Forget the fact that he signed off on the same Obama stimulus package he now rails against in order to get money for his state. That’s just what good Representatives do. It turns out Ryan, who also attended public school, has been happy to take the help of others since he was 18, when he saved the Social Security checks he received, as head of a fatherless household, and used them to go to college. He worked very hard at odd jobs while a Capitol Hill intern, and it was these connections which got him into politics.
Neither one of these men built a business from the ground up. The people they worked for didn’t, either. A combination of government help, hard work, initiative, and family assistance got them where they are today.
Rafalca is a business, at least on paper. Albeit one that can never turn a profit. Ann has maintained that the horse will never be sold, and as a mare, its breeding potential is limited. But Mitt refuses to release his tax returns for any time before 2010, because he’s “not a business.” (This directly contradicts his assumption, earlier in the campaign, that “corporations are people, my friend.”) The government is therefore subsidizing a business that Mitt didn’t build to the tune of $77,000, which is approximately what the average US corporation pays (among those that pay taxes, that is), and also about 2/3 of what the average small business makes in profits every year. The average US family makes about the same amount. And the federal government limit for deductions for an actual human child? $1,000 a year. Rafalca, according to those socialist tax codes, is worth 77 American children.
So you can see why Paul Ryan has a plan to eliminate tax code loopholes, supposedly like this one, although neither he nor Romney have ever made a public statement as to which ones would fall under the axe. But when you take into account the complete removal of capital gains, interest, and dividend taxes under Ryan’s plan, the 13.9 percent of taxes paid by Mitt in 2010 would drop to a little less than one percent. That average American family, on the other hand, would see their taxes go up by $1,300 a year. As I’ve pointed out before, that number means a lot more to someone not making six figures. But if you’re making over $100,000, your increase would actually be twice that: $2,600. So… good news there. Oh, and that $1,000 tax credit for each child? Gone. Rafalca is now worth infinitely more than Junior.
But Mitt is still willing to take the next $77K on the chin, because he’s that great a guy. (Unless he reopens one of those offshore tax havens he had his lawyer close when he realized he’d be running for The Big Job again in 2012.) As Obama points out, Mitt didn’t get there by himself — Rafalca has people who groom her, feed her, and care for her, all of whom are apparently subsidized by the US government. And the poor animal wouldn’t even be much of a business, having not even qualified for the Olympics medal round.
Mitt and especially Paul are at the center of that ideological crossroads, one which just about every other issue in the campaign must run through. Medicare, for example, is paid for with taxpayer money. It’s the kind of help that GOP members have themselves relied on — an interdependent community built around hard work, innovation, private funding, and government assistance. You may not like that their new mission is to remove that last item from the grasp of people like you and me, who need it the most. But then, if you’re so smart and hardworking, why aren’t you making a $22,000 profit having someone else teach a horse to dance?