Romney Tax Stances Just Don’t Add Up

It’s no wonder Mitt Romney’s tax plan sounds so similar in tone to his steadfast refusals to release his tax returns; nothing about any of the Romney tax stances add up.

The reason he steadfastly refuses to release his personal tax returns is easy. With as much damage as they’re doing to his campaign, there must be something more than privacy issues contained within those elusive pages. If you want to be President of the United States you can’t expect any privacy. The United States of America is not your company to do with as you please! No other president was afforded that privilege any and neither should Mr. Romney expect any. He has a choice and we should all demand he make it: Privacy and give up the Presidential run, or disclose and take your chances.

The Scoop On Another Romney Secret Tax Issue

Romney’s 59-page tax plan is another big mystery full of vagaries and generalizations. The nonpartisan Tax Policy Center, which conducted the most comprehensive analysis to date of Romney’s tax plan bent over backward to make his promises add up. Not surprisingly, they decided the same thing…the math just doesn’t work.

Romney himself summed up the best reason for not voting for him in a campaign speech in Detroit back in February :

“I believe the American people are ready for real leadership.” Romney said. “ I believe they deserve a bold, conservative plan for reform and economic growth. Unlike President Obama, I actually have one — and I’m not afraid to put it on the table.”

Well guess what. Romney lied again. Romney is afraid to put his plan on the table. Why? He has promised:

  1. To reduce the deficit, but refuses to identify the spending he would cut.
  2. To reform the tax code, but refuses to identify the deductions and loopholes he would eliminate.
  3. The only thing he actually has specifically identified is a promise to cut marginal tax rates by 20 percent across the board…and without raising the deficit or reducing the taxes paid by the top 1 percent.

The Tax Policy Center took Romney’s plan and  put his plan on the table for him. After all, he is used to others doing his work for him. He doesn’t like what the Tax Policy Center found however.

Even In A Rigged Game, Romney’s Plan is a Loser

In order to be as accommodating as possible, the center analyzed the plan under the most favorable conditions available and giving M. Romney’s plab the benefit of every doubt. Predictably, that latitude also rendered the conditions outrageously unrealistic. The analysts assumed the following:

  • Any cuts to deductions or loopholes would begin with top earners, and that no one earning less than $200,000 would have their deductions reduced until all those earning more than $200,000 had lost all of their deductions and tax preferences first.
  • They assumed, as Romney has promised, that the reforms would spare the portions of the tax code that privilege saving and investment.
  • They even ran a simulation in which they used a model partially developed, by Greg Mankiw, one of Romney’s economic advisers, that assumes “implausibly large growth effects” from tax cuts.

No matter how the center twisted, manipulated, or fiddled, the numbers simply never worked out.

Regardless of  the ways the Tax Policy Center contrived to make Romney’s promises add up, every simulation ended the same way: with a tax increase on the middle class. The tax cuts Romney is offering to the rich are simply larger than the sum of the all of deductions and loopholes that exist for the rich.

Ergo; it’s “mathematically impossible” for Romney’s plan to produce anything other than a tax increase on the middle class.

The Romney campaign offered two responses to the Tax Policy Center’s analysis, both misleading, but one infinitely more misleading than the other.

Oh What a Tangled Web

1)       First, the Romney campaign called the analysis “just another biased study from a former Obama staffer.” That dig refers to Adam Looney, one of the study’s three co-authors, who served in a staff role on the President’s White House Council of Economic Advisers. But the Tax Policy Center is directed by Donald Marron, who was one of the principals on George W. Bush’s Council of Economic Advisers. Calling the Tax Policy Center biased just isn’t credible. Romney’s own campaign referred to the group’s work as “objective, third-party analysis” during the primary campaign.

2)       Then the Romney campaign said, “The study ignores the positive benefits to economic growth from both the corporate tax plan and the deficit reduction called for in the Romney plan.” Well, there’s a good reason the study ignores those so-called “positive benefits”: Romney’s plan calls for a revenue-neutral corporate tax plan that brings the rate down from 35 percent to 25 percent. But it promises to simultaneously balance the budget. Even though Romney has not said how his plan will accomplish either goal. Until he does, those benefits will remain impossible to calculate….if they exist at all, which I doubt.

Austerity and/or Regressive Tax Cuts Have Proven Ineffective

If Romney tries to pay for his tax cuts by reducing government spending, the Europeans and Great Britain have proven that method is an abject failure. In fact, austerity has accelerated the downturns in both the UK and the Eurozone and is wrecking even the mighty German manufacturing sector because austerity dries up the last line of defense for demand.

Regressive tax cuts, as the Tax Policy Center notes, would be at least as harmful under the current economic conditions. Romney has promised to increase defense spending and hold benefits steady for the current generation of seniors, so there are no offsetting cuts there, assuming Mr. Romney would find a way to keep his promises which would be a first.

That only leaves programs that help the poor and the working middle-class. Those categories combined are the only big enough budget slice remaining from where Romney’s cuts could possibly come. This would entail giving even more tax cuts to the wealthy by eliminating programs for the poor AND eliminating the middle-class tax deductions that have given them their largest tax benefit for two generations; the mortgage interest and real estate taxes paid on their homes. If you think the housing market is bad now, take away that tax break and it will completely collapse. Guaranteed.

The Center on Budget and Policy Priorities produced its own study of Romney’s plan, based on an assumption that Romney’s plan offsets just half of his proposed tax cuts through spending reductions.

Their verdict?

By 2022, Romney would need to cut all non-defense, non-Social Security programs by 49 percent.

The Romney campaign, of course, refuses to answer questions raised by its own calculation.

It would be super-fantastic-dandy if Romney could carry out his promise to cut taxes by trillions of dollars, boost defense spending, keep entitlement spending on pretty much its current path for the next decade, and balance the budget. But two of the most notable bi-partisan groups of economists in the country have independently said that Romney’s proposed fiscal course of action just doesn’t make any sense. Even some Republican policy experts admit that Romney’s promises simply don’t add up.

The Romney campaign has made it quite clear that it feels it’s more advantageous to simply remain silent and to be considered evasive than to do ANY of the following:

  • Reveal details and remove all doubt that you’re either cutting taxes on the rich and increasing the deficit
  • Raising taxes on the middle class (collapsing the housing market completely) and cutting programs for the poor
  • Refuse to release personal tax returns despite running for the most powerful office in the world
  • Refuse to release details for a proposed economic plan that will adversely affect 99% of all Americans

Question: Who considers these kinds of alternatives acceptable?
Answer: People who benefit from them and don’t care about anybody else.

Harvey Gold