Sunday, June 17, 2012

Romney = dressage

What is it with horses?  Every time I teach the intro tax course in the U.S., we all have a good laugh at the sheer volume of horse-specific tax rules, many of which are outright giveaways (like the depreciation schedule...check it out, exciting!*  Of course the best laughs** come from the hobby loss case where Prieto, the orthopedic surgeon with the $300k-losing "horse activity" habit tries to pretend the horse activity is a business and not a means of entertaining his bored wife and kids.  Very few of my students ever think Prieto should get deductions for all the money he spent on horses.  Here's a write up in Equine Chronicle (Never heard of it?  Me neither).  This is all to say that the latest on horses is the increasing attention on the Romneys and their dressage activity.  Never heard of dressage before people started talking about Ann Romney?  Me neither.  It's horse ballet.  It's very expensive.  And it's generating tax deductions, apparently.  Big, big deductions:
The Romneys declared a loss of $77,000 on their 2010 tax returns for the share in the care and feeding of Rafalca, which Mrs. Romney owns with Mr. Ebeling’s wife, Amy, and a family friend, Beth Meyers. 
This blogger reminds us, that is more than the median family made last year.  Yes, it's quite a lot more.

Side note: declared a "loss"?   I don't think so.  I think they took deductions.  But I am not sure under what authorization.  It's not obvious from a quick look at their return, but I am sure some enterprising tax prof out there is already looking into it and will supply us with an answer in due course.

For me the story here is more about the effectiveness of using this dressage + tax break narrative as a rhetorical tool for political purposes.  What are the political implications if people equate Romney with some sissy elite thing like dressage, some sissy thing that costs more than they make in a year?  What if they then equate him with using that sissy elite thing to reduce his taxes by more than they made last year?  I am not sure how powerful a political tool this kind of narrative can be.  It is simple enough to be distilled and tweeted in 140 characters or less, perhaps, but only if you don't have to explain dressage.  Lower taxes = freedom is still shorter and more to the point.  Perhaps it is just more read meat for his opponents while completely off the radar for his supporters.

* If you're not excited by the Tax Code, I just don't know what to think of you.
** Some of these "laughs" may have been produced in order not to cry.

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