Those who believe former Governor Romney is presenting a “vision” for America, especially for the American economy, should move away from the fun house mirror. The numbers still don’t add up.
I could have sworn that Governor Romney proposed a smaller number for the total deductions cap at one point, [TP] but I might be suffering from Romnesia. (video) However, as of the last debate the former Governor would like for us to believe that his tax plan — which will “generate jobs” — will replace revenue lost from giving billionaires and millionaires a hefty tax break with a deductions cap of $25,000. Nope.
“Capping deductions would generate less additional revenue, and the higher the cap, the smaller the gain. Limiting deductions to $17,000 would increase revenues by nearly $1.7 trillion over ten years. A $25,000 cap would yield roughly $1.3 trillion and a $50,000 cap would raise only about $760 billion.” [taxvox]
Remember that Governor Romney’s calculations call for a reduction in government revenues, ” TPC estimates that on a static basis, the Romney plan would lower federal tax liability by about $900 billion in calendar year 2015 compared with current law, roughly a 24 percent cut in total projected revenue. Relative to a current policy baseline, the reduction in liability would be about $480 billion in calendar year 2015.”
As the chart above indicates there is no way Governor Romney can keep this promise:
“Romney has vowed to make up for all revenue the government would lose due to his proposed tax cut by eliminating tax breaks, particularly for the rich, and by a spurt of economic activity he anticipates would generate more money for the Treasury.” [Bloomberg]
What about those six studies which supposedly ‘prove’ this magic act will work? In the last week several factcheckers have been busily debunking this contention. See Politifact, Bloomberg, and New York Times.
The only way to make the numbers fit is to assume some fanciful increase in job creation and economic growth generated by tax cuts. And, in order to assume that tax cuts lead to economic expansion and therefore job growth is to buy in lock, stock, barrel, nuts, bolts, nails, tacks, and staples into the Supply Side Mythology Voodoo Economics Trickle Down Hoax.
Governor Romney is asking Americans to purchase his Supply Side Hoax, just as President George W. Bush promised that his Supply Side Tax Cuts would generate economic expansion — What happened?
The tax cuts for the ultra-wealthy (President Bush famously called them his base), helped fuel the Wall Street Casino which in turn created the Housing Bubble and the consequent financial collapse. And when the collapse hit during 2007-2008 we lacked the financial capacity — having already kept two wars off the books — to address the needs of Americans, their infrastructure, and their economy.
Tax cuts and deregulation were the ingredients offered by former President George W. Bush for economic expansion — they didn’t work. Now, presidential candidate Romney is energetically advocating following the EXACT SAME RECIPE but this time assuming different results.
And, what do we call “doing the same thing over and over again while expecting different results.” [answer]