Romneys Tax Plan Defies the Rules of Math

Discussion in 'Politics & Religion' started by AK Forty Seven, Aug 15, 2012.

  1. http://www.nytimes.com/2012/08/12/o...he-rules-of-math.html?_r=1&src=me&ref=general

    A Tax Plan That Defies the Rules of Math
    By DAVID FIRESTONE
    Published: August 11, 2012


    IN May of 2000, when George W. Bush was running for president on a platform of extravagant tax cuts for all, his campaign did something that would be considered remarkable today: it submitted his tax plan to the Congressional Joint Committee on Taxation, to see how much all those tax cuts would cost the Treasury.

    The bipartisan committee ran through the details provided by the campaign and predicted that the tax plan would cost about $1.3 trillion over nine years, an underestimate but a clear sign of its high price tag. With the budget in surplus at the time, Mr. Bush didn’t dispute that cost, and never tried to pretend that the cuts would be free. Within a decade, in fact, they would turn out to be the biggest factor in the huge deficit he created.

    Twelve years later, Mitt Romney, the presumptive Republican nominee, claims his far deeper tax cuts would have a price tag of exactly zero dollars. He has no intention of submitting his tax plan to the committee or anywhere else that might conduct a serious analysis, since he seems intent on running a campaign far more opaque than any candidate has in years.

    He has made his economic plan the fundamental basis of his candidacy, and yet with the Republican convention just two weeks away, we know next to nothing of the plan’s details. The extreme cuts proposed by his new running mate, Paul Ryan, are far more hard-edged, making Mr. Romney’s mathematically impossible promises look vague and shopworn by comparison.

    For example, Mr. Romney wants to keep all the Bush tax cuts, then cut taxes much further, particularly for the rich, but he says the plan won’t grow the deficit by a dime. He won’t say how he will accomplish this — there are no real numbers in his plan beyond a vague pledge to eliminate some loopholes. The Joint Committee would take one look at his substance-free plan and say, we can’t work with this.

    Mr. Romney’s tax proposal is no different from any other aspect of his economic plan. He promises to cut nondefense spending by 5 percent, but won’t tell voters what programs that will affect. He wants to repeal all of President Obama’s regulations that burden the economy, but won’t say which ones. And he pledges to eliminate health care reform, but won’t discuss how or even whether he would replace it.

    Earlier this month, a nonpartisan group of tax experts took matters into their own hands and tried to analyze the tax plan. What would happen, they asked, if you actually made all the cuts he has proposed? That would mean extending the Bush cuts, reducing income-tax rates by an additional 20 percent, and ending capital gains taxes for the middle class, the estate tax, the alternative minimum tax and the various taxes in health care reform, including the Medicare tax increase on high incomes. The experts at the Tax Policy Center estimated that this would cost $456 billion a year, starting in 2015.

    But Mr. Romney said the cuts would be “revenue neutral” and cost nothing because they would be paid for by ending tax breaks and loopholes. He never identified those tax breaks, and now we know why — the experts concluded that there aren’t enough loopholes in the tax code to balance out the cuts. Following Mr. Romney’s plan would mean ending popular deductions for mortgage interest and charitable contributions, which would wind up raising taxes on the middle class, while the rich would still enjoy the benefits of an income-tax cut larger than the deductions they would lose.

    Had Mr. Romney been the least bit serious about assembling a real tax plan, he would have known this. Instead, he hurriedly threw together his 20 percent tax-cut plan a week before the Arizona and Michigan primaries in February, at a time when Rick Santorum was proposing a similar idea. He said he wouldn’t touch middle-class tax breaks, and would “work with Congress“ to find offsets to the cuts.

    “Work with Congress.” Would that be the same body that almost caused a government default last year? Given how dysfunctional Congress has become, the real question is what policies a president will demand of Congress, and how forcefully he will fight for them. Telling voters that Congress will decide which tax breaks to eliminate is saying that you don’t have the courage to make a choice.

    On issue after issue, the dominant theme of Mr. Romney’s plan is a refusal to make real choices. He talks endlessly about his 59-point plan “to get America back to work,” but you can scrutinize all 160 pages of his economic booklet without finding any evidence of decision-making. A few examples:

    He says he wants to cut nondefense spending by 5 percent, and cap federal spending at 20 percent of the economy, down from about 24 percent. But what would that actually mean in terms of programs cut and services reduced? The plan is silent. The programs he mentions cutting are the comically minuscule national endowments for the arts and the humanities, foreign aid, family planning, Amtrak and a few others — all tattered Republican punching bags.

    The plans Mr. Ryan submitted as House budget chairman — which are now Mr. Romney’s too — were never models of clarity, but they at least made his priorities quite stark: more than three-fifths of his cuts would come from low-income programs like job training, Pell grants and food stamps. That’s not something Mr. Romney ever talked about on the stump, raising the question of whether the vice-presidential choice will end up defining the man at the top of the ticket better than Mr. Romney has himself.

    Mr. Romney wants to offload federal responsibility for Medicaid and move it entirely to the states by turning it into a much cheaper block-grant program. He claims this approach would save $200 billion a year, but never mentions that this would force states to drop coverage for at least 14 million people when states are unable to keep up with rising medical costs, which would raise emergency costs at local hospitals. He says he supports Mr. Ryan’s plan to provide the elderly with a fixed amount to buy either traditional Medicare or private plans, but has also said he would issue his own Medicare plan this fall, far too late.

    Beyond his standard line about undoing financial reform and Mr. Obama’s “anti-carbon” agenda, Mr. Romney has also vowed to repeal any Obama regulation that might burden the economy, without telling us which ones. Could he mean the power-plant rule that keeps mercury out of children’s lungs, perhaps? Or the one requiring better brakes on big trucks? Or the one expanding disability protections to people with AIDS or autism? Don’t expect an answer.

    The Romney campaign decided long ago that it didn’t need a real economic plan of its own when it could just bash the president’s. “As long as I continue to speak about the economy, I’m going to win,” he said last month. Voters, he is saying, need not inquire further.

    By David Firestone, a member of the New York Times editorial board.
     
  2. Ricter

    Ricter

    The author's mathematics are "demagoging" Romney to death.
     

  3. Its hateful and divisive on the authors part and he should stick to the issues :cool:
     
  4. jem

    jem

    tax cuts have been followed by increases in revenues..

    Bush
    Reagan
    kennedy
    Mellon

    facts and economic truth trumps leftist baloney.

    did you catch the fast one the article author pulled.
    He cited an a priori estimate. Should have tipped you off to leftist b.s right there.

    After Bush's tax cuts... revenues went up.
    That is a fact.

    Revenues went down after the wall street collapse.