Mitt Romney's new rich-guy problem

He's done a Cameron: Got in trouble for a horse.

Mitt Romney's done a Cameron. He's in trouble because of a horse.

The New York Times:

Mitt Romney and his wife, Ann, who plan to attend the opening of the Olympic Games in London this summer, now have a personal rooting interest in the event. Jan Ebeling, Mrs. Romney’s longtime riding tutor, and his horse Rafalca, co-owned by Mrs. Romney, earned a berth on the United States Olympic dressage team on Saturday.

Mitt Romney owns a horse. Not just any horse – an Olympic standard dressage horse. You know dressage – it's that horse-based sport which is second only to polo in its near-total lack of relateability to your average American voter.

The Romneys actually declared a loss of $77,000 on their ownership of the horse in 2010, and according to Matt Yglesias, the horse-related tax code is more complex than us non-horse-owning mortals could comprehend:

The way this works is that [the horse's owners] have together formed a corporate entity called "Rob Rom Enterprises LLC" which owns Rafalca and pays for his upkeep. The Romneys reported $77,731 in "passive losses" related to their investment in Rob Rom Enterprises but of that their account only deemed $50 to be actually eligible for deduction. The forms don't explain the thinking behind that, but it's probably because losses from your horse corporation can't be used to offset unrelated income. If Rafalca had brought in more money, then Rafalca's care and feeding expenses could be deducted from that income, but in 2010 Rob Rom Enterprises doesn't seem to have had much income.

That said, now that Rafalca is heading to the Olympics, he's likely to suddenly start bringing in a lot more money, which that $77,000 can be offset against. So at some point, Romney probably will end up paying less taxes because of a horse.

Horses: Not good for your reputation as a world-leader (unless you're Putin)

A dressage horse (and rider). Not Romney's dressage horse, sadly. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.