Romney’s Tax Policies Are a Joke


A new study describing Mitt Romney’s tax cut proposals as an average tax increase for 95% of Americans is “a joke,” according to Romney adviser Eric Ferhnstrom. But policy aides offered no indication they plan to offer more details on Romney’s plan in order to clarify how it would be paid for and what they assumed its effects would be.

This goes on all the time in the Mittens camp. Someone will issue a criticism, with supporting data, of a proposed Romney policy and explain why that policy would have bad effects. And the Romney camp will just say “no, that’s a lie,” without offering a counter-argument.

In this case, what counter-argument the Romney camp offers is simply a fantasy.

Mitt Romney’s policy director Lanhee Chen claims that a new study showing 95% of Americans would see a tax hike under Romney’s tax reform plan is “biased” and fails to take into account the explosion of economic growth that will occur under Romney’s administration.

Bring on the Underpants Gnomes.

Very, very simply, Mittens is proposing across-the-board tax rate cut, plus elimination of some taxes that only the wealthy pay, plus increases in the defense budget, because spending more money on defense — whether the Pentagon needs it or not — proves you are Serious. And this will be revenue neutral, they claim, paid for by spending cuts and by eliminating some tax deductions, although he won’t say what would be cut or eliminated.

The Brookings Institute (and I’ve seen this elsewhere) look at this and say that the only way this would be revenue neutral is to eliminate tax deductions that benefit the Middle Class and cut spending on programs that benefit the poor and Middle Class, meaning that it would amount to an effective tax increase on most Americans.

Ezra Klein explains,

The Tax Policy Center bent over backwards to make Romney’s promises add up. They assumed a Romney administration wouldn’t cut a dollar of tax preferences for anyone making less than $200,000 until they had cut every dollar of tax preferences for everyone making over $200,000. They left all preferences for savings and investment untouched, as Romney has promised. They even tested the plan under a model developed, in part, by Greg Mankiw, one of Romney’s economic advisers, that promises “implausibly large growth effects” from tax cuts. The fact that they couldn’t make Romney’s numbers work even when they stacked all these scenarios on top of one another shows just how impossible Romney’s promises are.

The reason Romney’s plan doesn’t work is very simple. The size of the tax cut he’s proposing for the rich is larger than all of the tax expenditures that go to the rich put together. As such, it is mathematically impossible for him to keep his promise to make sure the top one percent keeps paying the same or more. …

… “Families with children currently receive 57 percent of the available tax expenditures examined in this exercise but 23 percent of the revenue reductions. Thus a reform that imposed an across-the-board reduction in tax expenditures would increase taxes much more on families with children than on childless adults.”

It’s obvious the Mittens crew hasn’t worked out how their promises will be filled. In fact, when asked for details, they say that’s up to Congress.

But asked on a conference call whether the Romney campaign would offer up any more details on how they believe their plan would work instead, policy adviser Jonathan Burks demurred, saying it would be up to Congress to help fill in the blanks.

“The governor’s plan essentially lays out the parameters that he wants to achieve: lowering the tax rate by 20 percent, achieving revenue neutrality, and maintaining progressivity and within that he would write a tax plan that achieves those goals,” he said. “So, it’s not a question of ‘today we have a 2000 page tax plan that could be scored.’”

In other words, he’s expecting the help to make it work.

Update: Krugman

And the Romney people respond with deep voodoo, invoking the supposed fabulous growth effects from his tax cuts. And who could argue? Remember how the economy tanked after Clinton raised taxes? Remember how great things were after Bush cut them? Oh, wait.

3 thoughts on “Romney’s Tax Policies Are a Joke

  1. Ed Kilgore, and Political Animal, takes the following article by Jonathan Chait, and writes something very interesting:

    And here’s Ed’s post:

    To paraphrase Ed’s point – the Conservatives, used to listening to their own echo chamber, think the whole country is austerity crazy, and will be demanding the Ryan/Romney plan be something Mitt features when running – to help make sure he’s sufficiently conservative enough, and not some sort of flip-flopper who’ll say the wants the Ryan Plan, but later changes his mind.

    Conservatives seriously think the Ryan Plan is a winner for them!

    When in fact, when it’s explained to most people, they can’t believe an American political party would be crazy enough to cut taxes for the wealthy, while at the same time, raising taxes on the other 95% of the people.

    And the Conservatives are so dang, dog-gone proud of the Ryan plan, that they’ll be pissed-off if Mitt doesn’t trumpet it to the high heavens.
    After all, people are clamoring for it!
    What they don’t realized, it that the only people who are doing the clamoring, are the ones in their own echo chamber!

    I don’t think, if Mitt has to start pushing this as hard as the people behind him want him to, most people will cotton to the idea – and more voters than not, will run away from the Republicans, and to the Democrats.

    So, if Mitt DOES have to keep pushing the Ryan Plan, and featuring it, which Conservatives are likely to demand, he’ll be digging himself deeper and deeper with the voters.
    Oh, I can hardly wait for the debates!

    A I said a while back, let’s hope President Obama doesn’t take sighing lessons for them from Al Gore.
    But Obama doesn’t seem like much of a sigher or eye-roller.
    He’s more of a note taker, and then straight-shooter – usually with deadly accuracy.

    Interesting, no?

  2. If tax cuts stimulated growth, you wouldn’t have private corporations sitting on trillions of dollars (not exaggerating) instead of using it to create jobs.

    Romney is typical of a many “1%”-ers I know or know of: utterly incompetent “empty suits” who got their money through a combination of luck, family, or outright theft (“Vulture” capitalism).

  3. If tax cuts stimulated growth the way Romney would need, we wouldn’t have needed to borrow to finance the wars in Iraq and Afghanistan. Bush’s tax cuts would have made it rain prosperity, and we’d all be so rich we’d use golden toilets.

    I’m amused at the gumption of the Romney camp stance that he’s going to let Congress work out the details, he’s just going to specify the parameters. He really thinks he can get away with saying his plan involves something that oinks, is pretty much pig-shaped, has porcine DNA, and flies, but you can’t criticize it because Congress will work out the details. When the “parameters” don’t make sense, the details don’t actually matter.

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