Tag Archives: Romney Tax Plan

Romney Reveals Voodoo Economics and Fuzzy Math

In case you missed Chris Hayes’ “UP” this Saturday morning, please review the following segment.   It might be hard to find a more succinct summary of the Shell Game which Governor Romney is playing with his tax proposal — essentially the  “Bush Tax Cuts on Steroids.”   Governor Romney’s tax plan is a three part talking point scheme each part of which distracts from the mendacity of the other two.

As Mr. Hayes observed, they are actually mutually exclusive. For example, you can’t achieve revenue neutrality by lowering taxes for everyone.  Nor can you lower taxes for everyone without lowering them for upper echelon income earners.   If President George H.W. Bush was correct in labeling Supply Side economics as a form of Voodoo, then we might just as easily label Governor Romney’s tax proposals Sleight of Hand.

How to sell the notion that tax cuts for the extremely wealthy are Good for All of Us?  Haye’s points out the crucial element: “The wealthiest Americans will pay a higher percentage of taxes than they do today. Not a higher percentage of their income in taxes, since that would be an outright lie. This is a very common bit of conservative misdirection used to hide the distributional unfairness of their tax cuts.”  Here’s what the distributional effect of the Romney Tax Plan looks like if it were truly revenue neutral:

But, but, but “everyone’s taxes will be lower.”  However, NOT if the proposal is to be revenue neutral— you don’t get all three walnuts — pick one. If you firmly believe that lowering taxes for the upper level income earners in the United States will cause a tsunami of start up businesses and business expansion, then by all means pick the “everyone’s taxes will be lower” shell.  BUT, remember that all Governor Romney is promising is that the rich won’t pay a lower overall percentage of the revenue collected by the I.R.S. — NOT that they won’t see a reduction in their INDIVIDUAL tax liability.

There is no revenue neutrality in Governor Romney’s plan, at least not if you want one of the other two shells.   Something has to give, and this is the point at which his plan becomes extremely fuzzy.

Romney said in the debate that his plan wouldn’t cut enough tax breaks to offset all of his tax cuts. Economic growth, he said, would be generated by his tax plan and make up the difference. He hasn’t specified how much.”  [BusinessWeek] (emphasis added)   So, how much would the U.S. economy need to grow in order to make up the difference between his plan’s reductions in tax breaks to offset the tax cuts?  Who knows?  And, Governor Romney’s not providing the information necessary to properly analyze the results.

The other problem with Governor Romney’s shell game fuzzy math is that he has yet to specify which deductions would be capped or eliminated under his plan.  Vague promises about “working with the Congress” to determine the final shape of his tax policy are all well and good, as in “the devil’s in the details but the angel is in the policy.”  However,  without specificity there’s no way to make his numbers add up to anything even roughly approximating revenue neutrality.

If we assume, rationally, that the lack of real revenue neutrality in the former Massachusetts Governor’s tax policy means what a reduction in revenue always means — program cuts — then the cuts might very well look something like this:

In other words, the American public is being asked to pick a shell, which ever one sounds the best to the undiscerning ear, disregard the other two, and the result will most likely be:

Comments Off on Romney Reveals Voodoo Economics and Fuzzy Math

Filed under 2012 election, Economy, Politics, Romney, Taxation

Willard Mitt Romney: The Coloring Book Candidate

The Romney Strategy is beginning to evolve into something recognizable.  The problem is that it’s an amorphous shape that Etch-A-Sketches to fit any audience.  Think Progress offers a Magnificent Seven specific issues the Republican candidate won’t address.  There’s plenty of room to review some of  these points and to add more depth.

Ladies First: Governor Romney sidestepped when asked about supporting the provisions of the Lily Ledbetter Act [TP] but wait, there’s more.  During the flap about this dodge and weave the Romney campaign offered that the candidate “supports pay equity and is not looking to change current law.” [HuffPo] It’s important to note that the Ledbetter Act and the Paycheck Fairness Act are NOT the same thing — so, when candidate Romney was pressed on whether or not he would support the Paycheck Fairness Act he demurred, and responded with his attack line “The President should be more worried about jobs for women.” [HuffPo] And here we have the first page of our coloring book — Yes! the candidate is all for “pay equity” BUT maybe not for the Paycheck Fairness Act.

There’s another riddle to be teased out of the Romney commentary as well.  Romney charges that 92% of the job losses in this “dire economy” have been those of women.   Factcheck analyzed the number and found it wanting.  They even created their own chart:

Women’s jobs haven’t rebounded like those for men. Why is that?

 “If you look back to the start of the recession, many of the industries (construction and manufacturing) that were very hard hit initially were male-dominated,” said Margot Dorfman, CEO of the U.S. Women’s Chamber of Commerce, in an interview with FactCheck.org.

It wasn’t until later that jobs like retail and government jobs, particularly teaching jobs, began to take a hit, affecting women more, Dorfman said. Those jobs have been slower to recover.  [FactCheck] (emphasis added)

Those  job hits in government include teaching jobs lost when state and local funds weren’t available to maintain school staffing levels.   Thus, if candidate Romney were really serious about creating jobs for the women who were laid off then he’d be advocating plans to rehire teachers?  Uh, no.   According to the Department of Labor, women hold 68.6% of the jobs in the education sector, and 79% of the jobs in health and social services. [DoL spc rpt] Obviously, when teaching and health/social services jobs are cut women take the hit.

What did he have to say about education?  Is his “plan” something that would create  or save teaching jobs?

“… education has to be held at the local and state level, not at the federal level. We need get the federal government out of education. And secondly, all the talk about we need smaller classroom size, look that’s promoted by the teachers unions to hire more teachers. We looked at what drives good education in our state, what we found is the best thing for education is great teachers, hire the very best and brightest to be teachers, pay them properly, make sure that you have school choice, test your kids to see if they are meeting the standards that need to be met, and make sure that you put the parents in charge. And as president I will stand up to the National Teachers Unions… [Romney on Education] (emphasis added)

Not so much.  (a) Romney’s parroting the right wing line that the federal government has little if any interest in engaging in what has historically been a state and local concern.  This approach ignores federal contributions to Title I, special education, all the way around to school lunch programs and student loans.  If it’s a “state responsibility” then the federal government isn’t obliged to establish policy toward increasing the number of teaching jobs.  Sorry ladies.  (b) “We need to get the federal government out of education…”  (c) advocating for smaller class sizes is just a way for the unions to pressure school districts to hire more teachers?   Tell that to parents of a kindergartener in a class with 35 other kids. By the way, the right wing advocates have also charged that increasing the standards for teaching certificates is also a union plot to create artificial shortages of teachers and thereby to drive up wages.  (d) Ah, “school choice,” read: charters, vouchers, and other anti-public education schemes.  (e)Put parents in charge,” of what?  Let’s guess it’s a “market based solution” in which parent have a “choice” of privately operated schools.  Romney’s comments establish his bona fides as a “coupon conservative.”  This doesn’t sound much like a program to increase jobs for women.

In short, candidate Romney really hasn’t said anything, he’s merely provided some short-hand sound bites about “pay equity” (good) but “Pay Check Fairness Act” (maybe not), and “jobs for women” (good) but increasing employment in education where women’s jobs are saved or lost (Union Plot!) and the federal government doesn’t have any reason to get involved (except to promote school vouchers and beef up the bottom lines of test publication corporations).  The audience is invited to fill in the gaps with  preconceived notions already framed about Romney’s candidacy.  He is, politically speaking, a very empty suit into which a voter’s inclinations can be conveniently poured — one size fits all. Color him in with whatever shades you like.

Dearth and Taxes:   The Romney taxation policy is a great void of unspecified promises and equally vague notions.   Heaven knows the Tax Policy Center tried to run an analysis and this is as far as they got:

“Governor Romney would permanently extend all the 2001 and 2003 tax cuts now scheduled to expire in 2013, repeal the AMT and certain tax provisions in the 2010 health reform legislation, and cut individual income tax rates by an additional 20 percent. He would also expand the tax base by cutting back tax preferences, but has supplied no information on which preferences would be reduced. Tax provisions in the 2009 stimulus act and subsequently extended through 2012 would expire. These include the American Opportunity tax credit for higher education, the expanded refundability of the child credit, and the expansion of the earned income tax credit (EITC). The plan would also eliminate tax on long-term capital gains, dividends, and interest income for married couples filing jointly with income under $200,000 ($100,000 for single filers and $150,000 for heads of household) and repeal the federal estate tax, while continuing the gift tax with a maximum tax rate of 35 percent.2

The plan would reduce the six current income tax rates by one-fifth, bringing the top rate down from 35 percent to 28 percent and the bottom rate from 10 percent to 8 percent. The accompanying repeal of the AMT would increase the tax savings from the rate cuts—without that repeal, the AMT would reclaim much of the tax savings.”

Only the most die-hard ideologues are still clutching the fabrication that reduced taxation yields increased revenue, so how does Governor Romney propose to pay for this?

The plan would recoup the revenue loss caused by those changes by reducing or eliminating unspecified tax breaks, thereby making more income subject to tax. Gov. Romney says that the reductions in tax breaks, in combination with moderately faster economic growth brought about by lower tax rates, will make the individual income tax changes revenue neutral compared with simply extending the 2001 and 2003 tax cuts. He also promises that low- and middle-income households will pay no larger shares of federal taxes than they do now. [TPC](emphasis added)

What tax breaks would be reduced or eliminated?  He won’t say.  He’s already admitted that the Congressional Budget Office can’t score the plan because the “details will have to be worked out with Congress.” [TP] The idea that “we’ll work out all the details later” is becoming a recurrent theme with the former Governor.  Witness the immigration issue, wherein he won’t say if he’d continue President Obama’s policy on undocumented youngsters, because he’ll work out a Really Big Plan with Congress later.

What the audience may be listening for is “I’ll reduce taxes,and everything will be all right when I work it all out with Congress.”    The general guidelines are a bonus to the 1%, as reported by CNNMoney:

“Assuming the Bush tax cuts are extended, the Romney plan would give the top 1% of earners an average tax cut of $150,000, a 7.8% reduction in their average federal tax rate, according to the Tax Policy Center.

Americans in the middle 20% of income-earners would get an average tax cut of $810, a 1.4% tax rate reduction.Those making $1 million or more would receive an average tax cut of $250,000, an 8.1% tax rate reduction, while the average American would get $2,800, a 3.5% rate drop.”

The generalized Romney plan would definitely lower the effective tax rate for those in the upper income brackets:

But, Gee! Tax Cuts for Everybody  sounds so nice in the focus groups.  And, we’ll pay for it all by closing those loopholes I won’t specify….when I work it out…with Congress….  Color in your candidate with the crayon of your choice.

One of the nice things about being a Coloring Book Candidate is that whenever someone opines about the impact of your policy directives there’s always a back door to say, “I didn’t really mean that, my opponents are just trying to mis-characterize my position.”

So, what are we supposed to do with the hints about specifically what deductions and loopholes our Coloring Book Candidate is going to adjust?

One hint: “Romney also reportedly said he would probably eliminate the second-home mortgage deduction for high-income earners, as well as deductions for state income taxes and state property taxes.”  [CBS]

Right on cue, when objections were raised to eliminating these deductions the Romney Campaign said, “… he was merely responding to questions offering suggestions during the fundraiser, ” and “During a conference call, aides said Romney he was simply throwing out ideas, not outlining policy when he said he would combine or eliminate many government departments, agencies and tax credits to help offset his proposal to slash all U.S. tax rates by 20 percent.”  [Reuters]

Wasn’t that easy?  Any time someone objects or points out the counter-productive elements of a proposal, the Coloring Book Candidate merely slides gently out the most convenient exit — “I was Just Sayin.”

Back in the Dark Ages of Black and White Television there was a children’s program called “Winky Dink and You,” and for something like 50 cents you could order a sheet of plastic ( that was supposed to stick to the screen via the good offices of static electricity) and a collection of Genuine Original Winky Dink crayons.  Episodes contained a segment wherein the Little Viewer was supposed to Connect the Dots to complete a picture advancing the story line.  Many parents were none too pleased with Little Viewers who did not bother to attach the plastic cover, and found it more efficient to just draw directly on the TV screen.

Modern day voters, some of whom may have memories (fond, or not so fond when the vinyl sheet wasn’t used or got lost) of Winky Dink, are now invited to revisit those days when a person could create the desired colored scene before them.   Mitt Romney’s campaign invites you to approach the television set and figuratively color in his policies with what ever crayon from your Winky Dink collection you prefer.  Like the crusted wax on the TV screen of old, adults may be required to come in later and clean up the mess.

Comments Off on Willard Mitt Romney: The Coloring Book Candidate

Filed under 2012 election, education, Immigration, income tax, Romney, tax revenue, Taxation, Women's Issues, Womens' Rights

Positions Available At Romney’s Gaffe-A-Matic Campaign HQ?

Maybe former Massachusetts Governor Mitt Romney IS a “job creator?”  There are four recent examples of positions for which the incumbent seems a bit overwhelmed.

On April 19, 2012 Mr. Romney gave a speech on the economy in a vacant drywall  factory property, blaming the President for job losses.  A lovely background indeed, except for one little, but important detail — “The factory actually closed in June 2008, seven months before Obama took office. And during the Obama administration, unemployment has actually fallen in Ohio from 8.6 percent in January 2009 to 7.6 percent in February 2012.”  [TW] (emphasis added)

But, but, but, sputtered the Republican spinmeisters, the economy has been struggling for the last three years — yes, does that mean the President and his Administration hasn’t been cleaning up the Bush Administration’s mess fast enough?  Be that as it may, one job — either in the advance team or the Romney scheduling brigade — might well be open.

The Romney Campaign continued lurching through April.  On April 26, 2012 one of Mr. Romney’s top foreign policy advisers, Pierre Prosper stumbled on another brick in the road.

PROSPER: The United States has become a spectator on issues of national security. We’ve also been embarrassed by North Korea where again it continues to be a conciliatory leaning forward approach and yet the North Koreans will launch a missile surprising the United States by violating their agreement.

You know Russia is another example where we give and Russia gets and we get nothing in return. The United States abandoned its missile defense sites in Poland and Czechoslovakia, yet Russia does nothing but obstruct us, or efforts in Iran and Syria. (emphasis in original) [TP]

First, was anyone surprised the North Koreans attempted to launch a missile?  Was anyone particularly surprised when the 100th Founder’s Birthday Celebratory missile broke into pieces over the Yellow Sea?  Was anyone surprised the North Koreans broke a promise?  The Department of State didn’t seem “surprised,” rather more annoyed:

Despite the failure of its attempted missile launch, North Korea’s provocative action threatens regional security, violates international law and contravenes its own recent commitments. While this action is not surprising given North Korea’s pattern of aggressive behavior, any missile activity by North Korea is of concern to the international community. The United States remains vigilant in the face of North Korean provocations, and is fully committed to the security of our allies in the region. [USEmbassy](emphasis added)

Moving right along.  The Romney Campaign’s foreign policy adviser obviously didn’t get the memo, or read the newspapers in September 2009, when the Obama Administration announced:

“The “new missile defense architecture in Europe … will provide capabilities sooner, build on proven systems and offer greater defenses against the threat of missile attack than the… program” that former President George W. Bush proposed, Obama said.  Obama said the change of gears was based on an “updated intelligence assessment” about Iran’s ability to hit Europe with missiles.”

The Secretary of Defense continued: “This new approach provides a better missile defense capability for our forces in Europe, for our European allies and eventually for our homeland than the program I recommended almost three years ago,” said Gates, who was defense chief in the last two years of the Bush administration and stayed on when Obama took office.The Bush-era proposal called for the U.S. to set up a radar site in the Czech Republic and 10 missile interceptors in Poland to counter the threat of Iran launching long-range missiles at America’s allies in Europe.”  [CNN]

The Romney foreign policy “expert” either didn’t know the shift in Pentagon plans suggested circa 2006, or wants the U.S. to revert to a system already declared inadequate.   Maybe there’s a job opening here?  BTW, Czechoslovakia hasn’t existed since January 1993 — the old missile defense plan called for placement in the Czech Republic.  The new hire should have a solid grasp of place name geography?

May 1, 2012: Visiting NYFD’s  Ladder 5 & Engine 24 is a nice thing.  However, doing it on the anniversary of Osama Bin Laden’s death combined with commentary saying, “Even Jimmy Carter would have given that order,” Romney said, referencing the former president in his answer to a reporter’s question after a campaign appearance in New Hampshire,” [WNYC] and then making the visit with former NYC Mayor Rudy “Noun, Verb, 9/11” Giuliani equates to a multi-layered Gaffe-A-Matic mixed message.  Even Jimmy Carter? The Jimmy Carter who did pull the trigger:

“In the spring of 1980, Carter ordered a helicopter rescue attempt – one that ended disastrously and left an indelible scar on his presidency. Two of the eight helicopters developed problems on the way to a remote desert landing spot and had to turn back; a third had a hydraulic problem after landing. Carter canceled the mission but during the withdrawal, a helicopter collided with a C-130 transport plane, resulting in eight deaths.”  [HuffPo]

Yes, Jimmy Carter DID give the order for Operation Eagle Claw, and no, it did not work out well, no better than a subsequent “Black Hawk Down,” order.  The order that was NOT given was at Tora Bora.  An applicant for Mr. Romney’s security adviser position may want to read the U.S. Special Operations Command’s report “1987-2007” (pdf).

A new adviser may also want to be aware when making light of former President Carter’s alleged “softness” on defense, that the former President was a graduate of the Naval Academy, served on the USS Wyoming testing electronic and gunnery equipment, served on the team developing the first nuclear submarine (K-1), and retired from the Navy in 1953.  “After his father’s death in 1953, Carter resigned from the Navy to return to Georgia to manage the family interests. Carter was honorably discharged on 9 October 1953 at Headquarters, Third Naval District in New York City. On 7 December 1961, he transferred to the retired reserve with the rank of Lieutenant at his own request. ”  [USNavy]

Those who have not served would do well not to be dismissive of the service of others.   The new hire in the Romney campaign office would do well to remember this maxim.

And, now coming full circle, the Romney campaign will shift back to “The Economy” with a speech in northern Virginia, “the switch back to the economy on Wednesday allowed Romney to focus on his strengths as a businessman — a core message of his campaign.”  [TheHill]

Oh, yes, by all means, let’s return to the “economy,” wherein we bump into the Romney Fiscal Fantasy Plan:

“The Romney campaign has been very clear about what the former governor is promising: $5 trillion in tax cuts on top of extending the Bush tax cuts, with those benefits heavily weighted toward the country’s wealthiest taxpayers. Romney himself has acknowledged the lack of details, stating in reference to his tax plan that “frankly, it can’t be scored.” I have been party for many years to searches for “high-income tax shelters” that can feasibly be closed. I know of no reputable expert in either political party who would find that there is anything even approaching $5 trillion in potential revenue to be generated from this source.” [Summers, WaPo]

Maybe a new tax policy adviser needs to get on board? A new economic adviser? Someone in the Romney Campaign needs the ability to spin straw into gold in order to explain how the Predator’s Ball of Bain Capital danced around the issue of off-shoring and job elimination:

“… the firm had made a lot of money while closing factories, eliminating jobs, using tax-sheltered offshore accounts, and, in some cases, driving the companies it had bought into bankruptcy. “Bain Capital is the model of how to leverage brain power to make money,” Howard Anderson, a professor at M.I.T.’s Sloan School of Management, told the Globe. “They are first rate financial engineers. They will do everything they can to increase the value. The promise (to investors) is to make as much money as possible. You don’t say we’re going to make as much money as possible without going offshore and laying off people.” [NewYorker]

And so, the Romney Campaign blithely blunders into May.   We’ll have to wait to see if it “creates” any more jobs.

Update: May 2, 2012 the Romney campaign announces the resignation of Richard Grenell from their foreign policy team, seems he’s gay… [WaPo]

Comments Off on Positions Available At Romney’s Gaffe-A-Matic Campaign HQ?

Filed under 2012 election, giuliani, Romney