Robber Barons, 21st-Century Style
According to the Brookings Institute Tax Policy Center (the TPC is a Brookings project), Romney will raise taxes on the middle class in order to pay for tax breaks for corporations, the rich, and especially the super-rich.
Brookings has been called “liberal” (as well as “centrist” and even “conservative”) in the past, but in fact is centrist, or at least a muddle of various positions. The Tax Policy Center is noted as being carefully non-partisan. While one of the three economists who made the analysis was an Obama adviser, another was an adviser to Bush 41. Furthermore, the institute went out of its way to make the analysis as favorable to Romney as possible. If there are any errors or misinterpretations, they are the fault of the Romney campaign for not making public all of the plan–probably because they know it’s bad news and are trying to hide it. But this analysis is decidedly not a liberal smear against Romney.
So, what is Romney’s plan? If you recall, he plans to:
- cut all income taxes by 20%
- reduce the corporate tax rate from 35% to 25%
- eliminate the estate tax
This is all, of course, heavily slanted to the rich. Take the 20% income tax cut for “everyone.” Sounds fair, right? Everyone gets the same cut, right? Welllll, no. If you pay as much as 35% on your income, you get a 7% cut; if you pay, say, 10% (which the poorest tax-paying families do), you get a paltry 2% cut.
Yep, that’s fair, right? And why do this? Under the presumption that rich people will then use that money to create jobs. Which is complete BS. We know for a fact that this kind of tax cut is the least stimulative expenditure the government can possibly make.
Then corporations get a whopping 10% tax cut, or 30% of their current rate. And will they be required to add a single job? Hell, no. Nor will they, if they can manage it; corporations are about increasing profits, not jobs.
And the estate tax? Well, right now, a married couple would have to inherit more than $10 million for even one penny of an inheritance to get taxed. And farmers and small business owners–usually trotted out as the “victims” of the estate tax–are rarely, if ever affected by the tax. Only a handful of farms a year, for example, owe anything at all, and the family gets 14 years to pay it. Nope: this tax is ultimately a tax on the rich, and a tax on the rich only. Paris Hilton, this cut’s for you!
In the meantime, the cuts would hike the deficit by hundreds of billions of dollars more than Bush’s standing cuts already do–more tax cuts for the rich that Romney wants to defend, by the way–and Romney has promised to be revenue-neutral on this. So, how can he pay for it?
By socking it to the middle class, of course:
His rate-cutting plan for individuals would reduce tax collections by about $360 billion in 2015, the study says. To avoid increasing deficits–as Romney has pledged–the plan would have to generate an equivalent amount of revenue by slashing tax breaks for mortgage interest, employer-provided health care, education, medical expenses, state and local taxes, and child care–all breaks that benefit the middle class. …
Millionaires would get an $87,000 tax cut, the study says. But for 95 percent of the population, taxes would go up by about 1.2 percent, an average of $500 a year.
Got that? Romney himself will get enough to pay for another car elevator, while Joe Six-pack has to give up, well, you decide–money for his kids’ college funds? Any hope of paying off his mortgage early? Cutting corners like buying enough clothes, or food, or what few luxuries the family can afford nowadays? Or, probably, more likely, just descending even further into debt.
Anyone who makes less than a couple hundred grand a year and votes for Romney is either a certifiable moron, or they care enough about conservative social values or foreign policy to pay through the nose for it. But then, 45% were stupid enough to vote for McCain, another nine-figure millionaire who forwarded tax plans which would also short-change poor and pay handsomely to the rich.
And none of this even touches on the fact that Republicans are on the record as wanting to tax people who are so fracking poor that they can’t even pay taxes in the first place. If Romney gets into office, the chances are that the Republican Poor Tax will be far more likely to pass.
Contrast this to Obama, who wants to end the deficit-bloating Bush tax cuts for the wealthy, while maintaining the tax cuts for the middle class–and in the meantime, has cut the payroll tax, as well as several other taxes, for the poor and the middle class. For people who work, not for people whose fortunes work for them.
Romney, predictably, is calling the study “biased” and “liberal.” Neither institution involved is “liberal,” and if they are biased, it was in favor of Romney, not the reverse.
Not to mention that when the exact same group that the Romney campaign is now calling “liberal” and “biased” came out with a report on Rick Perry’s tax proposal last November, Romney called it an “Objective Third-Party Analysis.”
Krugman takes a look at the study and confirms that not only were they fair, they actually went out of their way to be more fair than they needed to be:
The question one might ask is, did TPC – which is actually painstakingly and painfully nonpartisan – make questionable assumptions to get its results, so that some other set of assumptions might portray Romneynomics in a more favorable light? And the answer is no: TPC actually bent over backwards to literally give Romney every possible benefit of the doubt.
Here’s what they did. They took Romney at his word that he plans to offset his cuts in income tax rates by broadening the base, that is, limiting exemptions and other loopholes. They also assumed, however, that Romney would not be willing to tax dividends and capital gains as ordinary income, since he has made it clear that he opposes any rise in taxes on investment income. As they point out, this leaves a relatively small pool of loopholes to close – big enough that the Romney tax cuts could, in principle, be paid for by base broadening, but not with a lot of room to spare.
So which loopholes are closed? TPC made the most Romney-friendly assumption they could – namely, that base broadening is concentrated on top incomes as much as possible. First you eliminate all deductions that benefit those with more than $1 million in income; then all that benefit those with between $500,000 and $1 million; and so on. …
So they’re actually giving Romney every possible benefit of the doubt – and still his plan is a redistribution from the middle class to the rich. In practice it would surely be much worse.
Not much to decode in Romney’s charge: if the conclusion is unfavorable to Romney, it must be liberal. Forbes, which concluded that the TPC was impartial, or perhaps only slightly left-leaning, came to that conclusion in part by asking if the TPC analyses “loved” Obama’s or McCain’s tax plans better. That’s baloney–if Obama’s plan was fiscally more responsible and more accurate in its claims, the TPC would not be “liberal” for recognizing that. This is more of that BS “balance” in reporting–if Obama tells the truth and Romney lies, you can’t say that without being “liberal” or “pro-Obama.”
In the end, the real question is, was the TPC’s analysis fair? And the answer seems clear: it was more than fair.
As Krugman pointed out, and as I did earlier, if the Romney campaign doesn’t agree, they can release the details of the plan themselves and show everyone how ‘fair’ their plan is. Romney wants to be secretive about his religion, secretive about his taxes, secretive about just about everything–including, apparently, his proposals for what he would do as president. We, apparently, have no business knowing what they are, and we’re liberal and biased if we make the best possible guess while being as favorable to Romney as possible.
That’s fair, isn’t it?