Beating a Dead Horse: The Left Media Lies About Romney Taxes

One of the hottest attack memes on Mitt Romney is the allegation that he received $77,000 tax break on his ‘pet dancing horse.’ The story isn’t true -- even the liberals who started the myth now admit that -- but how this falsehood was hatched, grew and spread is an object lesson in the deception that the left will be gleefully engaging in from now until election day.  

It all started with a June 12 episode of Comedy Central’s The Colbert Report about the Romney’s interest in horses and the sport of dressage, where highly trained horses perform a complicated routine set to music. The segment allowed Stephen Colbert to mock Mitt Romney as an out of touch elitist while simultaneously mocking ‘Joe Six Pack’. 

As The New York Times reported on a piece about the Romneys and horses:

“Folks,” Mr. Colbert said, “the image of Romney as a privileged princeling ends today, because now Mitt is just your average blue-collar fan of dressage.”

To show it can take a joke, the United States Equestrian Federation distributed 500 foam No. 1 fingers here, a cheeky reference to a prop Mr. Colbert used in his skit as he clutched a beer bottle in his other hand and cheered, “Woo!”

But here’s what jumped out of the article for some people...the barest whiff of scandal. 

But as Mr. Colbert’s satire suggested, the scrutiny may not be entirely a blessing for Mr. Romney’s image as a man in touch with the concerns of average Americans. As millions tune in to the Olympics in prime time this summer, just before Mr. Romney will be reintroducing himself to the nation at the Republican convention, viewers are likely to see “up close and personal” segments on NBC about the Romneys and dressage, a sport of six-figure horses and $1,000 saddles. The Romneys declared a loss of $77,000 on their 2010 tax returns for the share in the care and feeding of Rafalca...

Aha! $77,000! Tax Returns! This was immediately picked up on by Slate’s Matthew Yglesias, who did a piece entited The Tax-Deductibility of Horse-Related Expenses in which he substituted snark for facts.

It's of course true that curbing the deductibility of expenses related to the care and feeding of dressage horses might inhibit investment in the critical dressage sector of the economy. But I'm skeptical that incentivizing capital formation in this particular area is all that vital to the long-term prosperity of the country.

To be fair to Yglesias, he did post an update three days later in which he (almost) admitted that the sloppy, kneejerk, biased reporting on his initial post had led him to imply something that wasn’t true. The truth, Yglesias was forced to admit, was:

The loss was over $77,000 but that only generated a $50 tax deduction. It's possible that the deduction will become much more valuable in the future if Rafalca generates fees.

In other words, the Romneys spent $77,000 on the horse. This was a speculative business expense but, since there was no profit, they weren’t actually deducting $77,000. If there’s profit in the future on their horse business investment, then the status of their outlay may change. If you’re really a tax law nerd, there’s a detailed discussion over here called The Tax Treatment of Ann Romney's Dressage Horse Activity. It’s detailed and factual, which means it doesn’t make for a juicy Anti-Romney headline. 

This is where the anti-business arrogance and ignorance of the left comes into play; they don’t even understand a fairly basic business tax concept. Further, they are in such a gallop to get a hit piece on Mitt Romney that they don’t even take the time to attempt to understand the actual underlying issue before hitting the Publish button.

The left media knows “Mitt Romney Gets A $50 Tax Deduction” isn’t a great headline. Their easy solution: when the facts don’t serve the narrative, just ignore the facts.

Just like that, the left-wing news and blogosphere was off to the races. After the intial Yglesias piece hit, a host of pieces that all keep the “$77,000 Tax Deduction” Myth alive.  Here’s MSNBC’s Laurence O’Donnell    actually launching a passive-aggressive attack on Ann Romney’s love of horses helping her battle MS, to boot. Here’s Thom Hartmann on Russia Today, selling the lie of the $77,000 tax deduction. Here’s Cenk Uygur, The Young Turks  & CurrentTV making infographics and repeating the falsehoods. Here are a slew of pieces from The Daily Kos to The Democratic Underground to The Political Carnival and photo memes all bouncing the story around the left-wing echosphere.

The internet allows the false meme to spread far and wide. While some tied the "$77,000 Tax Deduction” myth into Romney’s speech to the NAACP, others like CurrentTV and The Atlantic Wire linked it to healthcare:

Rafalca, the Romney's Olympics-bound dressage horse, nets the family a $77,000 tax credit, $2,000 of which, according to Current's calculations, is for what they spent on health care for the horse. The average American family only spends $1,557 a year on health care. 

Even Yglesias’s ‘Update’ headline actually helps perpetuate the myth -- the correction piece is called Clarifying The Record on Mitt Romney's $77,000-Loss Olympic Horse Rafalca -- and so that’s what shows up in the search results when you Google for information. You see “$77,000-Loss Olympic Horse” and for people who don’t click through to the article, that’s what will stick. The headline could have been “Retraction: Romneys Got $50 Deduduction On Horse” but again, that doesn’t help the narrative that Yglesias would like to see out there. 

Expect to hear the retracted, corrected, false story of Mitt Romney’s $77,000 tax deduction for his dancing horse repeated over and over from now until November. When you do hear it, point out the truth and point out how the story spread like wildfire even though it’s...well, something that comes out of a horse. 


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