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.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.