David Cay Johnston, Pulitzer Prize-winning journalist who writes about tax issues. He is a former New York Times reporter and author of several books, including, most recently, The Fine Print: How Big Companies Use "Plain English" to Rob You Blind.
In a newly unearthed recording released by Mother Jones magazine, Republican presidential nominee Mitt Romney tells a crowd of donors that he thinks 47 percent of Americans are "dependent" on government and see themselves as "victims." The video has ignited what could be the biggest political firestorm facing Romney’s campaign to date. We’re joined by Pulitzer-winning journalist and author David Cay Johnston, a former New York Times reporter and author of several books, including most recently, "The Fine Print: How Big Companies Use 'Plain English' to Rob You Blind." Johnston says Romney’s tax plan is "a plan for dynastic wealth. It is a plan to take care of the already rich. It is not a plan, as he claims, to help the strivers who want to get ahead." [includes rush transcript]
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. We’re on our 100-city tour. I think we’re in city 16 at this point. We’re here in Chicago. I’m Amy Goodman, as we turn to what could be the biggest political firestorm facing Republican presidential nominee Mitt Romney’s campaign to date. In a newly unearthed recording released by the magazine Mother Jones, Romney tells a crowd of donors [that] he thinks 47 percent of Americans are dependent on government and see themselves as victims.
MITT ROMNEY: 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 that government has a responsibility to care for them, who believe that they’re entitled to healthcare, to food, to housing, to you-name-it, that that’s—it’s entitlement, and the government should give it to them. And they will vote for this president no matter what. And that—I mean, the president starts off with 48, 49, 48—he starts off with a huge number. These are people who pay no income tax. Forty-seven percent of Americans pay no income tax. So our message of low taxes doesn’t connect. So he’ll be out there talking about tax cuts for the rich. I mean, that’s what they sell every four years. And so, my job is not to worry about those people. I’ll never convince them that they should take personal responsibility and care for their lives. What I have to do is convince the 5 to 10 percent in the center.
AMY GOODMAN: On Tuesday, Mother Jones released the full, unedited 49-minute video of Mitt Romney speaking on May 17th to wealthy donors at the home of controversial private equity manager Marc Leder in Boca Raton, Florida. Tickets for the dinner cost $50,000 a plate.
In comments that have received less attention, Romney is also heard on the original tape joking to his audience that he would have a better chance of selection had he been born a Latino. Also during the dinner, Romney discussed various foreign policy positions that have raised further questions. At one point he says Palestinians have, quote, "no interest whatsoever in establishing peace and that the pathway to peace is almost unthinkable to accomplish," unquote. On the topic of Iran, Romney warned, quote, "America could be held up and blackmailed by Iran, by the mullahs, by crazy people," unquote. Romney also called Middle East peace, quote, "almost unthinkable."
On Tuesday, Mitt Romney appeared on Neil Cavuto’s Fox News show and defended his comments.
MITT ROMNEY: Well, we were of course talking about a campaign and how he’s going to get close to half the vote, I’m going to get half the vote, approximately, I hope. I want to get 50.1 percent or more. And, frankly, we have two very different views about America. The president’s view is one of a larger government. There’s a tape that just came out today where the president is saying he likes redistribution. I disagree. I think a society based upon a government-centered nation, where government plays a larger and larger role, redistributes money, that’s the wrong course for America. That will not build a strong America or help people out of poverty. I believe the right course for America is one where government steps in to help those that are in need—we’re a compassionate people—but then we get—let people build their own lives, create enterprises. We believe in free people and free enterprise, not redistribution. The right course for America is to create growth, create wealth, not to redistribute wealth.
AMY GOODMAN: President Obama addressed Mitt Romney’s comments during an appearance on The Late Show with David Letterman.
PRESIDENT BARACK OBAMA: When I won in 2008, 47 percent of the American people voted for John McCain, they didn’t vote for me. And what I said on election night was, even though you didn’t vote for me, I hear your voices, and I’m going to work as hard as I can to be your president. And one of the things I’ve learned as president is you represent the entire country. And when I meet Republicans as I’m traveling around the country, they are hard-working family people who care deeply about this country. And my expectation is that if you want to be president, you’ve got to work for everybody, not just for some.
AMY GOODMAN: For more, we’re joined right now by Pulitzer Prize-winning investigative journalist David Cay Johnston. He’s a former New York Times reporter, author of a number of books. His latest just came out this week. It’s called The Fine Print: How Big Companies Use "Plain English" to Rob You Blind.
David Cay Johnston, it’s great to have you back to Democracy Now!
DAVID CAY JOHNSTON: Thank you.
AMY GOODMAN: The 47 percent—explain Mitt Romney’s comment.
DAVID CAY JOHNSTON: Well, first of all, he’s conflating totally unrelated things. Many of the 47 percent he’s talking about are people who work. They work at crummy jobs at crummy pay. Because of the Republicans, a married couple with two children does not pay income taxes until they make $44,000 a year. That’s because of the Republicans promoting the $1,000-per-child tax credit. So, he’s actually insulting many of the people who voted or likely would vote for him. Many of the people in this 47 percent, which is a brief anomaly because of the economy, are retirees, people who worked all their lives. Now they’re retired, and because Social Security is their major form of income, they don’t make enough money to pay taxes. This is an astonishing statement by him to suggest that 47 percent of the population are moochers who just live off the government.
AMY GOODMAN: And what about, for example, retired military?
DAVID CAY JOHNSTON: Oh, they would fit in that group. Romney, if he chose to, could arrange his affairs, quite legally, to pay no taxes. When he ran Bain, he could have fallen into this group. He won’t give us his tax returns, so we don’t know. But it would be—it’s very easy for the manager of a hedge fund or private equity fund to have a billion-dollar income and pay no income taxes and not appear in the official government data. So, it’s astonishing. And, you know, his approach to this is very much a sort of country club, have no contact with people who are working-class people or middle-class people. It represents an us-versus-them philosophy, the exact opposite of what you saw in the comments that Barack Obama made about, you know, "I’m president of everybody, including people who voted against me."
AMY GOODMAN: And clearly, he was deeply concerned, Mitt Romney, about this video getting out, because he held a news conference at, what, 10:00 at night—
DAVID CAY JOHNSTON: Yeah.
AMY GOODMAN: —and talked about how maybe he inelegantly spoke.
DAVID CAY JOHNSTON: Well, I don’t think he was being inelegant at all. He was appealing to donors. But, you know, Amy, there’s a deeper question about all the things happening in the Romney campaign. Here’s a businessman who holds himself out as somebody who is a master at figuring out how to make a lot of money off of a business, either buying one and sucking the capital out of it or, in some cases, building one, as he’s done. But he appears to have no plan, no business plan for a campaign, and stumbles from place to place, has not thought through what he’s doing. And that should raise, I think, serious questions in the minds of voters about the man’s judgment and about whether he’s going to be a president who does research and understands how things work and looks at multiple perspectives, or he has an ideological view of the world, and he would impose that, and it would drive all of his decisions as president.
AMY GOODMAN: Can you explain Mitt Romney’s tax plan, David Cay Johnston?
DAVID CAY JOHNSTON: Yes. Mitt Romney’s tax plan is vague. The much fuller explication of it is Paul Ryan’s tax plan. But basically, Romney believes that people whose income comes from capital, like him—from dividends, interest, capital gains, rents—should pay little or no tax. He would exempt a married couple making up to $250,000 from taxes on capital gains and dividends. So you could own $12-and-a-half million worth of stock, collect dividends at the current average rate, and pay no taxes whatsoever.
Ryan would completely eliminate taxes on capital, on estates and on gifts. And if we do that, that is the end of America as a country of entrepreneurs and strivers, whether they’re in profits or nonprofits, like the kind of entrepreneurial activity that you have done in building up this show and maintaining it all these years. We would become like France in the late 18th century, where your economics were determined at birth by who you picked as your parents. And if you didn’t pick parents who were already rich, then you’re going to have a tough life. This is a plan for dynastic wealth. It is a plan to take care of the already rich. It is not a plan, as he claims, to help the strivers who want to get ahead.
AMY GOODMAN: David Cay Johnston, can you just explain how Mitt Romney has been able to keep his tax rate so low, although we don’t know actually how much he has paid because of the refusal to make public his tax returns?
DAVID CAY JOHNSTON: Well, for the one year we have his tax return, his income is almost all what’s called "carried interest." Even though he does not—did not have capital at risk, he was paid fees from Bain Capital, and that turns into dividends, capital gains, which, under the Bush administration’s tax policy, are taxed at 15 percent. That’s the rate paid by schoolteachers. But, of course, Mitt Romney is making over $20 million a year. If you’re a worker who makes that kind of money, you pay 35 percent, not 15.
In addition, Romney pays the taxes on behalf of his five sons. So he put—he and his wife put in property they valued at about a million dollars, certainly no more than $2 million. That trust fund is now worth $100 million, which tells you how porous the gift tax system is in America. And his sons now get tax-free income for life, each of them having roughly $20 million there working for them, and they don’t have to do a thing to get their income from it.
AMY GOODMAN: David Cay Johnston, what is most important to understand about the fine print? And I’m talking about the title of your new book, How Big Companies Use "Plain English" to Rob You Blind.
DAVID CAY JOHNSTON: Well, this book, I spent four years on, Amy. It is original research. This is not anything you will find going to Google. And I show in this book how we have rewritten commercial rules that, some of them, date back thousands of years, that companies now have been raising prices in many industries well above the rate of inflation. There are businesses out there that have gotten rules passed that require you to pay them a tax that they don’t have to pay to the government. Imagine how well off you would be if somebody else paid your taxes. I literally have a large insurance company going to a man paralyzed from the neck down and asking him to die because it was costing too much money to keep him alive. That’s how out of control things have gotten with business in America.
And what Romney and Ryan propose, of course, is to completely unshackle business in America. And all the way through the book, I show how dangerous conditions are propping up all over. We had a whole city block blow up in San Bruno, California, and killed eight people, including, by the way, the California Public Utilities Commission staffer whose job was to investigate the safety of natural gas pipelines, which is what blew up and killed her.
AMY GOODMAN: I want to continue this conversation offline. We’re going to post the conversation about The Fine Print at democracynow.org and play it on the broadcast, as well. Pulitzer Prize-winning journalist David Cay Johnston, I want to thank you so much for being with us. Again, his book, The Fine Print: How Big Companies Use "Plain English" to Rob You Blind.
And that does it for today’s broadcast. If you want to get a copy, you can go to our website at democracynow.org. As we continue our 100-city tour, I’ll be speaking on Thursday night at the Barrymore Theatre in Madison, Wisconsin. And then on Friday in the afternoon, we’ll be in Eau Claire at the Unitarian Universalist Church; in the evening, in Hayward, Wisconsin. And then, on Saturday night, we’ll be in Minneapolis. You can go to our website at tour.democracynow.org to get all the details of this 100-city tour.
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