Romney on Defensive: Study Says Romney Tax Plan Will Help the Rich
Presumptive Republican nominee Mitt Romney has a new problem in terms of image and explaining some substance: a study finds his proposed tax plan will help the rich. Here’s a bit of Newsy.com’s report:
Taxes are back on the political menu this week. The nonpartisan Tax Policy Center released a report today on Mitt Romney’s proposed plan for taxation, and it wasn’t flattering. The report concludes that Romney’s plan …
TPC: “… would provide large tax cuts to high-income households, and increase the tax burdens on middle- and/or lower-income taxpayers.”
In fact, the study says, Mr. Romney’s current proposal for taxes, albeit incomplete, would cut tax revenues by $360 billion dollars. During a Wednesday campaign stop in Ohio, President Obama seized the opportunity to criticize the presumptive GOP nominee’s tax plan.
Obama: “He’s not asking you to contribute more to pay down the deficit … He’s asking you to pay more so that people like him can get a big tax cut.”
Bloomberg’s Josh Barro says Mr. Romney’s plan is less about tax revenues and more about maintaining a neutral deficit by giving out tax breaks while cutting government spending. Barro also says:
Barro: ” … it’s not necessarily true that the Romney plan would raise taxes on middle- and lower-income tax filers. If Romney cuts taxes enough, his plan could give a tax cut to everybody… “
Note that Romney’s camp tries to play the ideological red meat card by dismissing the study as “liberal” but that isn’t being bought by many, including as the report notes, some who are not considered liberal. Watch the full video report on this issue:
Note that there is new polling out (a post on that will appear soon) that underscores Romney’s now quite serious image problems.
This kind of report coming out — from a group considered nonpartisan (not considered liberal unless it’s at this moment in a campaign when there is an attempt to discredit a study that is not helpful) — will not boost his poll numbers.
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All nonsense about magic underwear aside, the study only confirms what has long been obvious about a large segment of the political right: namely their belief that greed is a family value. Conversely they seem to believe that empathy is some sort of liberal trick.
Romney’s major problem is the electoral college. The RCP Average tells us there are 100 EVs up for grabs and Obama needs 23 of them and Romney needs 79. Obama leads in most of them and if Romney doesn’t get Florida it’s game over. The taxes will end up hurting Romney – he can’t release any more because the 2009 returns are toxic – my guess is he took advantage of the UBS amnesty. His tax reform is an obvious redistribution of wealth in the wrong direction.
I just hope Mitt realizes that making the middle as financially healthy as possible is the holy grail. Take care of these people, while maintaining a safety net and reasonable comfort for the poorest, is the golden goose to be groomed. If those two do well, then it will trickle UP to the upper class tax payers.
Eliminating as many tax shenanigans for all and reasonably flat tax rates, personal and corporate (sort of like Simpson-Bowles), will make paying taxes a pleasure (just kidding), or less onerous and minimize the class disparity/warfare.
It appears Romney is tripping again…
Romney and his neocon fleet of advisors are eyeing Iran and other middle east countries for more American expansionism. Any vote for Romney is a vote for more expensive military expeditions and more deficit spending. Our current debt is bloated from the expense of two wars and will only increase with a Romney presidency, especially if those who profit from military spending have their taxes lowered.
I don’t care much for either the Romney or the Obama plans as both seem full of holes. The Romney plan does involve cutting taxes on everyone so it was difficult to understand how lower tax brackets would end up paying more.
I read the Brookings report and I still don’t follow their reasoning that the tax burden would increase on the lower incomes – what assumption am I missing here? I could see if they concluded the plan could not maintain revenue neutrality but they specifically say the tax burden will increase on lower classes. Can somebody tell me what I am overlooking?
DaGoat,
My understanding of the study is this: to maintain deficit neutrality, the Romney plan anticipates eliminating or reducing exemptions and write-offs like home mortgage interest, child care credit, property taxes and other deductions that favor the middle class. By reducing or eliminating those deductions, taxable income increases, and the actual tax paid would increase for middle class tax payers even though the marginal rate goes down.
Since the wealthy do not get as great an advantage (on a ratio to income basis) from those deductions, they would not be hurt as much by those changes, would benefit more from the decrease in marginal rates, and their actual taxes paid would decrease.
Whether the study’s assumptions are accurate, I don’t know.
TB, perhaps we could reduce the $77,000 deductions like the one Romney took for his wife’s horse (excuse me therapeutic equine).
http://www.thedailybeast.com/articles/2012/08/03/lay-off-the-dressage-attacks-on-mitt-and-ann-romney-s-horse-rafalca.html
A horse is a horse of course and I got the horse right here…………….
dduck, my understanding is they deducted 77K expenses but the net allowed deduction was only 50 bucks. Can’t remember where I read it though.
tidbits thanks, that explains the Brookings conclusions although they make assumptions that are not part of Romney’s tax plan, namely in order to balance revenues Romney must make get rid of certain deductions, something I don’t think Romney has ever said. I’ll be the first to say Romney’s plan doesn’t add up, but Brookings seems to have treated it in such a way that they could claim it raises taxes on the middle class. In that sense both Romney’s and Brookings’ conclusions are dubious. I’ll hasten to add a major weakness of Romney’s and Ryan’s budgets are the lack of clarification of what deductions they would cut – Brookings seems to made those decisions for them.
Re: the original article.
Sadly, I already used my Captain Obvious joke this week. I’m on a strict quote. Therefore, I have nothing to add.
“something I don’t think Romney has ever said”
He has said that reducing all marginal rates and reducing/eliminating deductions and credits is the plan, but when asked about which specific deductions and credits would be eliminated, he says that congress will have to figure that out.
Ron you may have used your Captain Obvious joke of the week but I haven’t! I’m going to put this article down with the one from earlier this week about how liberals and moderates lean towards supporting gay marriage rights. Both should be featured in this months issue of “Duh!” magazine.
Let me sum up Romney’s plan. I’ll dispense with the way back history lesson of the 1920′s and 30′s. Lets just go back to 2001. We implemented a tax plan that essentially gave a lot of money back to the rich, in order to spur job creation and increase wages for the middle class, which of course the wealthy would do if only they had a little more money. The results are in. Nothing of the sort happened. In fact, there is a mountain of evidence that it made things way worse in terms of shoring up the middle class in this nation, the middle class that powers the economy. Romney’s plan to fix things, MORE OF THAT!!
I’m reminded of something a metaphor a comedian once said about gambling in Vegas. Its like going out to the desert on a hot summer day and picking out a rock that has been baking in the sun. Then taking that rock and shoving it up your ass. You run around screaming OW OW OW! why did I do that? That really hurt. Then picking out another rock, and saying, “Maybe this rock will be different.”
Oh and just to be clear, Romney is that second rock.
“Oh and just to be clear, Romney is that second rock.”
I love it. The presidential election as a decision of which burning hot rock we’d prefer to shove up our bums.
The Tax Policy Center (non-partisan) as indicated in the link and from Ezra Klein:
[The numbers never worked out. No matter how hard the Tax Policy Center labored 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 size of the (non-investment) deductions and loopholes that exist for the rich. That’s why it’s “mathematically impossible” for Romney’s plan to produce anything but a tax increase on the middle class. ]