It's an easy choice between Barack Obama and Mitt Romney on tax

Compared to Romney, Obama is downright folksy.

President Barack Obama isn't a populist but he plays one on the campaign trail. Like many liberal Democrats, he plays up the down-home rhetoric for votes, but by nature he's a progressive technocrat immanently comfortable trusting the authority of experts. This comes from being the son of an anthropologist and former editor of the Harvard Law Review. This is why he sounded so wooden when attempting to rail against "fat cat bankers," and why he needs Vice President Joe Biden, a natural-born class warrior.

But the president's populist mien stems from more than campaign strategy. It's context, too. Compared to quarter-billionaire Mitt Romney, his Republican challenger in the 2012 presidential election, no-drama Obama appears downright folksy. Sure, working-class Americans don't usually feel kinship with a former constitutional law professor, but that's far better than a guy who owns a dressage champion competing in the 2012 Summer Olympics. It'd be one thing if Romney's horse was a racing steed. Americans understand betting on the ponies. But dressage? First, it sounds kinda French. Second, that means a dancing horse, right?

That's slightly unfair. But Romney isn't helping.

First, he's not being clear about his wealth. He has released only two years of tax returns. This has allowed the Obama campaign to suggest, rightly or wrongly, that he's hiding something. And in fairness, that's a plausible charge given that Romney has cash stashed in the Cayman Islands and Switzerland, and the reason you do that is to avoid the prying eyes of the Internal Revenue Service.

Second, the central claim of his candidacy — that he is an experienced businessman who knows how to create jobs — took a major hit last month after a report in the Washington Post found that Bain Capital, Romney's former Wall Street firm, invested in companies that pioneered the trend of outsourcing jobs.

Romney's reaction was twofold and too dumb — he demanded that the newspaper retract the story (it said no) and he said the reporters didn't know the difference between outsourcing and offshoring. Frankly most people don't, and if you're trying to save face by splitting hairs, good luck to you. You're going to need it.

Third, he rebounds poorly. Parsing "outsourcing" and "offshoring" was just the beginning. Last week, the Associated Press revealed that Romney has investments in a company in Bermuda, raising more questions about transparency and indeed how wealthy Romney actually is. Estimates so far put his wealth at as much as $250m, making him the richest man to run for the White House in recent memory (Obama's wealth is as high as $3m).

And again, Romney stumbled badly: "I don’t manage [those investments], I don’t even know where they are," Romney told a radio station in Iowa, a battleground state. "That trustee follows all U.S. laws, all taxes are paid as appropriate, all of them have been reported to the government. There’s nothing hidden there."

This kind of explanation flies with people who have blind trusts, but not with people who don't have trusts or don't know what trusts are, and sure as hell don't know why they are blind. And anyway, Romney could dispel the ambiguity by releasing more returns just as his father, George, did before making a run for the presidency.

Now Obama is hitting hard: "What’s important is if you are running for president is that the American people know who you are and what you’ve done and that you’re an open book," he told a New Hampshire TV station. "And that’s been true of every presidential candidate dating all the way back to Mitt Romney’s father."

My guess is that Romney won't release more tax returns, because he doesn't want to bring more attention to himself. I say this not because I think he's hiding something (though he may be for all I know), but because Romney wants this election to be a referendum on the president's first term not a choice between him and Obama.

The reason for that is Americans tend to give incumbents the benefit of the doubt, but if Romney can raise enough doubt about the economy — and with a stalled economy on the brink of a double-dip recession, there's good reason for this strategy — he can frame the election as a thumbs-up-thumbs-down vote.

Obama, on the other hand, is doing his best to make this a choice between opposing candidate, parties and ideologies. Yesterday, we saw the latest stage of that strategy when he called for Congress to allow the George W. Bush-era tax cuts for the wealthiest two per cent of income earners to expire at the end of the year.

This is good politics for two reasons. One, most Americans approve of such a measure, partly because taxing the rich lowers the national debt and partly because taxing the rich just feels good. The second reason this is good politics: It puts Romney in a box. Obama highlighted the fact that he himself would be paying higher taxes and that he stood ready to do so. Romney, meanwhile, has said letting the tax cuts expire is bad for small business, which may be true. What's certain is that Obama is setting up a choice.

American voters can choose the rich guy willing to pay more in taxes for the good of his country or the rich guy who didn't.

That, to most Americans, is an easy choice.
 

Mitt Romney's tax affairs are being efficiently used against him by Obama. Photograph: Getty Images

John Stoehr teaches writing at Yale. His essays and journalism have appeared in The American Prospect, Reuters Opinion, the Guardian, and Dissent, among other publications. He is a political blogger for The Washington Spectator and a frequent contributor to Al Jazeera English.

 

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Brexit has opened up big rifts among the remaining EU countries

Other non-Euro countries will miss Britain's lobbying - and Germany and France won't be too keen to make up for our lost budget contributions.

Untangling 40 years of Britain at the core of the EU has been compared to putting scrambled eggs back into their shells. On the UK side, political, legal, economic, and, not least, administrative difficulties are piling up, ranging from the Great Repeal Bill to how to process lorries at customs. But what is less appreciated is that Brexit has opened some big rifts in the EU.

This is most visible in relations between euro and non-euro countries. The UK is the EU’s second biggest economy, and after its exit the combined GDP of the non-euro member states falls from 38% of the eurozone GDP to barely 16%, or 11% of EU’s total. Unsurprisingly then, non-euro countries in Eastern Europe are worried that future integration might focus exclusively on the "euro core", leaving others in a loose periphery. This is at the core of recent discussions about a multi-speed Europe.

Previously, Britain has been central to the balance between ‘ins’ and ‘outs’, often leading opposition to centralising eurozone impulses. Most recently, this was demonstrated by David Cameron’s renegotiation, in which he secured provisional guarantees for non-euro countries. British concerns were also among the reasons why the design of the European Banking Union was calibrated with the interests of the ‘outs’ in mind. Finally, the UK insisted that the euro crisis must not detract from the development of the Single Market through initiatives such as the capital markets union. With Britain gone, this relationship becomes increasingly lop-sided.

Another context in which Brexit opens a can of worms is discussions over the EU budget. For 2015, the UK’s net contribution to the EU budget, after its rebate and EU investments, accounted for about 10% of the total. Filling in this gap will require either higher contributions by other major states or cutting the benefits of recipient states. In the former scenario, this means increasing German and French contributions by roughly 2.8 and 2 billion euros respectively. In the latter, it means lower payments to net beneficiaries of EU cohesion funds - a country like Bulgaria, for example, might take a hit of up to 0.8% of GDP.

Beyond the financial impact, Brexit poses awkward questions about the strategy for EU spending in the future. The Union’s budgets are planned over seven-year timeframes, with the next cycle due to begin in 2020. This means discussions about how to compensate for the hole left by Britain will coincide with the initial discussions on the future budget framework that will start in 2018. Once again, this is particularly worrying for those receiving EU funds, which are now likely to either be cut or made conditional on what are likely to be more political requirements.

Brexit also upends the delicate institutional balance within EU structures. A lot of the most important EU decisions are taken by qualified majority voting, even if in practice unanimity is sought most of the time. Since November 2014, this has meant the support of 55% of member states representing at least 65% of the population is required to pass decisions in the Council of the EU. Britain’s exit will destroy the blocking minority of a northern liberal German-led coalition of states, and increase the potential for blocking minorities of southern Mediterranean countries. There is also the question of what to do with the 73 British MEP mandates, which currently form almost 10% of all European Parliament seats.

Finally, there is the ‘small’ matter of foreign and defence policy. Perhaps here there are more grounds for continuity given the history of ‘outsourcing’ key decisions to NATO, whose membership remains unchanged. Furthermore, Theresa May appears to have realised that turning defence cooperation into a bargaining chip to attract Eastern European countries would backfire. Yet, with Britain gone, the EU is currently abuzz with discussions about greater military cooperation, particularly in procurement and research, suggesting that Brexit can also offer opportunities for the EU.

So, whether it is the balance between euro ‘ins’ and ‘outs’, multi-speed Europe, the EU budget, voting blocs or foreign policy, Brexit is forcing EU leaders into a load of discussions that many of them would rather avoid. This helps explain why there is clear regret among countries, particularly in Eastern Europe, at seeing such a key partner leave. It also explains why the EU has turned inwards to deal with the consequences of Brexit and why, although they need to be managed, the actual negotiations with London rank fairly low on the list of priorities in Brussels. British politicians, negotiators, and the general public would do well to take note of this.

Ivaylo Iaydjiev is a former adviser to the Bulgarian government. He is currently a DPhil student at the Blavatnik School of Government at the University of Oxford

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