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President Obama could have made a very simple case about Romney’s tax plan, as follows:
Gov. Romney, you have been specific about some parts of your tax plan, but not others. For example, you have called for a 20% reduction in tax rates across the board, which, all sources agree, would in itself decrease income tax revenues by $4.8 billion over the next ten years. You and Rep. Ryan have objected to this characterization by insisting that you plan is revenue neutral. The Government will receive the same revenue, but just get if from different sources. (This is called redistribution of income.) You have been very specific about the shiny exterior of the rate cut but, like a used car salesman,have not let us look under the hood at the redistribuive part of your plan. Let’s see what these might entail.
- You have pointedly noted that about 47% of families pay little or no Federal income tax, although they pay many other taxes: payroll taxes, state property and sales taxes, etc. You have also said that this group, which includes the unemployed but also senior citizens, active duty soldiers and veterans, the very rich, like yourself, who pay taxes only on capital gains, and those working one or more low-paying jobs will see no benefit from this rate reduction. These benefits will thus go only to the upper 53% of wage earners.
- It may be possible to offset this 20% revenue loss by cutting these revenue expenses, but it will be difficult. Here are the major revenue expenses, in decreasing order, according to the Congressional Budget Office.
- Deductibility of health care premiums (businesses and individuals)
- Exclusion of pension contributions (businesses and individuals)
- Home mortgage interest deductions
- Special tax rates on interest and capital gains
- Exclusion of capital gains taxes on estates
- State and local tax deduction
- Charitable contributions deduction [Note: the last three are about the same size.]
Governor Romney, five of these seven revenue expenses mainly affect the middle class, but would have to be severely reduced to make your plan revenue neutral. Are you prepared to specifically include or rule out any of these? If not, why not?
3 Comments
cobernicus:
During last night’s Presidential Debate, Romney says:
“There are all these studies out there. But let’s get at the bottom line. That is, I want to bring down rates. I want to bring the rates down, at the same time lower deductions and exemptions and credits and so forth, so we keep getting the revenue we need. And you’d think, well, then why lower the rates.”
This is exactly what Bowles-Simpson’s proposal prescribes. Here’s the hyperlink to “The Moment of Truth (PDF)” the B-S proposal:
http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf
President Obama, and his Chief-of-Staff Jack Lew have both endorsed Bowles-Simpson. President Obama also endorsed the 2011 “Gang of Six” proposal, during a press conference.
During last night’s Presidential Debate, President Obama said:
21:31:48: OBAMA: That’s what we’ve done, made some adjustments to it (meaning Bowles-Simpson), and we’re putting it forward before Congress right now, a $4 trillion plan…
This is in reply to Mitt Romney’s assertion that President Obama has ignored Bowles-Simpson.
Unclear why he says “putting . . . right now,” since Congress is on recess. So, it appears that he is referring to the Gang of Eight’s legislation, that will be introduced immediately after the November election.
Here’s the link below to the piece entitled: “Leaders at Work on Plan to Avert Mandatory Cuts,” NYT, October 1, 2012.
http://www.nytimes.com/2012/10/02/us/senate-leaders-at-work-on-plan-to-avert-fiscal-cliff.html?pagewanted=all&_r=0
Here’s an excerpt below from this article, which states that both Social Security and Medicare are slated to be cut:
“First, senators would come to an agreement on a deficit reduction target — likely to be around $4 trillion over 10 years — to be reached through revenue raised by an overhaul of the tax code, savings from changes to social programs like Medicare and Social Security, and cuts to federal programs. Once the framework is approved, lawmakers would vote on expedited instructions to relevant Congressional committees to draft the details over six months to a year.”
Clearly, last night’s debate was Kabuki Theater.
[Below is a hyperlink to the transcript of the October 3, 2012 Presidential Debate.]
http://www.cnn.com/2012/10/03/politics/debate-transcript/index.html?eref=rss_mostpopular
Blue
Assuming that your conclusion is correct, the silence/hesitancy of the Pres. is a bit more understandable, is it not? Thanks.
I’m not certain if your comment is addressed to me, but if it is, yes, I can see why President Obama might not want to address the issue of his plan to implement Bowles-Simpson.
However, in my opinion, it is “unacceptable” for either candidate to refuse to divulge their true intentions. As despicable as Romney and Ryan may be, they appear to be at least “a bit more forthcoming” as to their intentions.
Part of the blame should be borne by the MSM, of course. They never press for any details. Which I think shows that they’re “part of” the kabuki theater.
Blue