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Romney's Impossible Tax Promise


US Politics & Gov't  (tags: abuse, americans, candidates, constitution, corruption, dishonesty, economy, elections, lies, politics, propaganda, Romney, republicans, taxes )

Kit
- 865 days ago - factcheck.org
Romney has proposed very specific tax cuts. He would make the Bush-era income tax cuts and capital gains tax cuts permanent, then cut all income tax rates by an additional 20 percent across the board, repeal the Alternative Minimum Tax-->



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Kit B. (276)
Saturday August 4, 2012, 7:36 pm

Summary
Tax experts — including one who supports Romney’s plan — say the Republican presidential candidate’s promise to cut individual income tax rates without either favoring the wealthy or losing revenue isn’t mathematically possible.

That’s the conclusion of the Tax Policy Center in a report the Romney campaign attacked as “biased” (although the campaign previously praised the TPC as “objective,” when it issued a report critical of a rival’s tax plan).

And it’s also the conclusion of an expert from the pro-business Tax Foundation, who states that the Tax Policy Center analysis “correctly identified the Romney plan as a tax cut, at least in static terms, that accrues mainly to high-income earners.”

Romney has proposed very specific tax cuts. He would make the Bush-era income tax cuts and capital gains tax cuts permanent, then cut all income tax rates by an additional 20 percent across the board, repeal the Alternative Minimum Tax (which hits primarily upper-income taxpayers), and permanently repeal the estate tax (which currently applies only to estates valued at $5 million or more).

Romney has said he would offset the loss of personal income tax revenue (estimated at $360 billion a year by the Tax Policy Center) by reducing tax deductions and credits. And he has said he would do this while making sure that those at the top keep paying the “same share of the tax burden they’re paying now.”

But he has steadfastly refused to say which tax preferences would be cut or reduced. He has pointed to the revenue-neutral proposals for rate-cutting put forth by the deficit commission as evidence that what he proposes is possible in theory, but those proposals pay for the cuts largely by taxing capital gains at the higher rates that apply to ordinary income, a measure Romney has specifically ruled out.

So Romney has failed to produce evidence that what he promises is possible. And we judge that the weight of evidence and expert opinion is clear — it’s not possible.

Romney says this criticism ignores his separate plan to cut corporate tax rates, which he says will stimulate economic growth. Indeed, there’s evidence to suggest that cutting corporate taxes can do that, and the Tax Foundation expert (who supports Romney’s plan) suggests that more jobs would be an acceptable trade-off for a less progressive personal income tax system.

But how much growth to expect is debatable, especially because Romney proposes to cut only the corporate tax rate, not corporate taxes overall. He would offset the rate cut by eliminating tax preferences resulting in no loss of revenue. During the Bush administration, Treasury Department experts concluded that the corporate rate could be dropped to 28 percent without losing revenue (Romney proposes 25 percent), but that such a trade-off “might well have little or no effect” on economic growth.

Romney’s experts predict about a 1 percent increase in growth. One of the authors of the Tax Policy Center study says that is “implausibly large” and even if it materializes it wouldn’t prevent a tax increase on middle-income taxpayers under Romney’s income tax plan.

There’s room to argue that the benefits of increased growth are a fair trade for a less progressive tax system. In fact, that’s exactly the case made by the Tax Foundation’s expert, who notes that “the currently unemployed will receive the greatest benefit in the form of a job.”

But Romney’s claim that he can somehow slash individual income tax rates without losing federal revenue or favoring the wealthy remains at best unproven, and in our judgment, based on available evidence, impossible.

Analysis
The Evolution of a Tax Plan

Mitt Romney first revealed his tax plans on Sept. 6, 2011, in a 59-point economic plan titled “Mitt Romney’s Plan for Jobs and Economic Growth.” The former Massachusetts governor proposed maintaining the Bush-era income tax rates, repealing the estate tax and lowering the corporate tax from 35 percent to 25 percent and broadening its base. The plan was criticized by the Wall Street Journal as “surprisingly timid.”

The campaign expanded it on Feb. 22, 2012, to include repealing the Alternative Minimum Tax and cutting the marginal income tax rates by an additional 20 percent across the board. The Wall Street Journal quoted Romney as saying “he would direct Congress to make up lost revenue from the rate cuts by limiting deductions, mostly for wealthier Americans.”
*****

by Eugene Kiely and Brooks Jackson | Fact Check.org |

Full article with sources at Visit Site.

 

Jason S. (57)
Saturday August 4, 2012, 8:40 pm
just giving away money to the wealthy
 

Susan V. (81)
Saturday August 4, 2012, 9:08 pm
In his "People's History" of the US-- Zinn explains how in the 50s a 91% tax on wealth resulted in a period of growth and prosperity for the middle class. Placing higher tax on earnings that exceed (say $1 million now) is an incentive for employers to share the wealth with employees. When we had 91% tax on earnings over a million (400,000 - back then) - CEO's would still make as much as 40 times more than their highest paid employees -- then as that tax percentage decreased - with every president since Carter (Reagan and Bush decreasing tax on wealth the most) CEO's began making 400 times more -- and now it's even more than that.

This is creating the gap that is causing social inequality that is responsible for so many of our problems. Wilkinson's lecture on TED explains the impact of social inequality on societies - it's bad for the rich as well as the poor - it's bad for everyone.
http://www.ted.com/talks/richard_wilkinson.html

Dr. Bronner's founders and owners pledged not to take over 10% what their highest paid employee makes, and there is a documentary film about this story. (I hope this is still the case). This is the example our country needs to follow. However, as long as the law allows it, the corporation has an obligation to make as much profit as possible by any means necessary, or else they can be sued by their shareholders, I am told.

Those in the general public who invest (through their retirement fund investments or whatever) in these greedy corporations are adding to the problem.

We can all join divestment movements as well as demanding a healthy tax on wealth.

There are two divestment movements I know of - one to stop supporting the private prison industry (CCA and GEO Groups) and another to stop supporting the fossil Fuel industry.

Also - please sign this if you haven't --
http://www.thepetitionsite.com/897/097/749/mandatory-tax-disclosure-for-presidential-candidates/
 

Jennifer C. (169)
Sunday August 5, 2012, 5:04 am
Thank you.
 

Jane H. (138)
Sunday August 5, 2012, 11:41 am
excellent article....thanks so much Kit.
 

Roseann d. (178)
Sunday August 5, 2012, 12:15 pm
If it sounds too good to be true, it IS. Typical of the 1%, Romney doesn't give a F%CK about us.
 

Vallee R. (253)
Sunday August 5, 2012, 12:19 pm
I just can't wait until he starts crying when he loses.
 

Past Member (0)
Sunday August 5, 2012, 12:20 pm
More corporate fascism for the super, duper, unfairly rich. To bad he's going to get routed by Obama.

We were born at night....
 

Diana Bair (7)
Sunday August 5, 2012, 12:47 pm
A vote for Romney is a vote to make this country for the rich by the rich OWNED by the RICH.And the corporations, we might as well be turned to commumnism, thats how it real point with ...ROMNEY!!!!. Diana.
 

jan b. (3)
Sunday August 5, 2012, 1:30 pm
We're not stupid, we're not buying what you're selling MITT , and you don't get to say "y'all." cause you don't mean anything you say.
Mitt you have $100 million deferred in an IRA that is supposed to be for retirees who put aside money when they are going to live on a fixed income. You place money offshore that you madein the USA for other countries to use....and now you are going to fix the taxes so to be certain the 1% get more breaks. FORGET IT!!!

 

Nancy M. (202)
Sunday August 5, 2012, 1:33 pm
Great find Kit. Thanks for posting.

I have not been as thrilled with Obama as some are, but REALLY don't want to see the return of trickel down (which doesn't).
 

Kit B. (276)
Sunday August 5, 2012, 1:41 pm

Trickle down - reminds of something that happens when young children are learning "potty training", they often have a trickle down.

Obama is very much a "middle of the road" kind of guy, I don't expect that he will change much if re-elected.

Romney is now deeply indebted to those who have poured millions and more millions into his campaign. Obama is way behind in dollars support and must depend strongly on people support. Should Romney be elected we will not "go back" to any sort of "good old days" as many are dreaming about. Though his policies to move us forward will mean the average American can expect more financial crisis, and more American institutions to be privatized.
 

Dave C. (227)
Sunday August 5, 2012, 1:42 pm
...and of course he still wants to cut cut cut, but not the military........trickle down didn't work in the 20s and hasn't worked from the 80s to now.....don't get fooled again, this is another Greedy Obstructing Poisonous pollution party ploy to scam the average wealth citizens....
 

Kit B. (276)
Sunday August 5, 2012, 1:43 pm

janice b -- "The profile you are looking for could not be found"
 

Wayne W. (12)
Sunday August 5, 2012, 2:15 pm
There is no evidence that cutting taxes for the rich or for corporations creates jobs or promotes prosperity. Corporate taxes are already at a 40-year low. We know for sure that of every 3 dollars in tax cuts for the rich, 2 dollars go directly to the debt. That's a principle component of the debt in the first place.

Here's the level of honesty on which Mr.Romney and his supporters operate:

Corporation That Paid Nothing In Taxes For Four Years Tells Congress It Pays Too Much In Taxes
http://thinkprogress.org/economy/2012/07/20/558931/corporation-that-paid-nothing-in-taxes-for-four-years-tells-congress-it-pays-too-much-in-taxes/

26 Major Corporations Paid No Corporate Income Tax For The Last Four Years, Despite Making Billions In Profits
http://thinkprogress.org/economy/2012/04/09/460519/major-corporations-no-taxes-four-year/
 

Wayne W. (12)
Sunday August 5, 2012, 2:35 pm
Consider this article in Rupert Murdoch's Wall Street Journal:

With Tax Break, Corporate Rate Is Lowest in Decades
http://online.wsj.com/article/SB10001424052970204662204577199492233215330.html

"Union Pacific Co. said the benefit lowered the railroad's taxes by $450 million last year compared with the year before"
Speaking of which, you should be aware of this:

.Are Chamber of Commerce President Tom Donohue's Ties to Union Pacific Railroading the Companies that Support Climate Policy?
http://switchboard.nrdc.org/blogs/paltman/are_chamber_of_commerce_presid.html

"What is the connection between Union Pacific Railroad , dirty coal and the US Chamber?"
 

Kit B. (276)
Sunday August 5, 2012, 2:44 pm

According to article Wayne the ties seem deeply intertwined and barely if at all legal.

"Starting with Mr. Donohue: US Chamber President Tom Donohue has been on the board of directors at Union Pacific since 1998. As a Union Pacific board member, Donohue has been well cared for.

He has been paid annual retainers by Union Pacific amounting to at least $1,134,333 since 1998.
According to the company's 2008 proxy statement, Donohue has been granted over 43,000 shares of Union Pacific stock, and is entitled to the value of nearly 20,000 more shares when he leaves the board - a package whose combined value would be over $3.8 million if he were to sell it today.
So being on the Union Pacific board can be seen as worth about $5 million to Tom Donohue, so far. (You can piece all this compensation together from the company's proxy statements.)
In addition, Union Pacific has been good to the US Chamber:

Union Pacific has given $700,000 to the US Chamber since 2004, including $500,000 to the Chamber's "Leadership Fund" (a common name for PACs run by Chambers of Commerce), $100,000 to a voter education project in 2006 and $100,000 to an award ceremony in 2007. (These contributions to the Chamber are reported in the company's 2009, 2008 and 2007 proxy statements.)
Ok, but it is common for people in Donohue's position to be on various boards and such. So what? Well, I don't know what the US Chamber's policy on conflict of interest says, but if it doesn't cover this situation, it needs fixing."

http://switchboard.nrdc.org/blogs/paltman/are_chamber_of_commerce_presid.html
 

Seth E. (65)
Sunday August 5, 2012, 3:15 pm
Romney's just continuing the right wing fallacy that enriching the wealthy creates jobs, but it's never been true, and it never will be.

Jobs are created by demand, and to create demand, there must be money in the pockets of those who spend the most, specifically the 99%.

Once the rich have all they want, they'll just stash any excess. They don't wave magic wands and sprinkle magic pixie dust made of their extra dollars to create jobs just because they feel like it; there has to be a reason to start a business and to staff it with employees.

Sure, some people in these bigger corporations invest and innovate to create some jobs, but the majority of businesses are smaller ones, such as stores, restaurants, and other services that cater to more localized consumers, but if those people in those areas don't have money to spend on those goods and services, then businesses there can't survive, and new ones won't be opened, further adding to the ranks of the unemployed.

If we really want to fix things, we need government spending for infrastructure and other public services, and this will create jobs from which taxes would be collected on the incomes of the employees, and they'll have more spending power to purchase goods and services where they live, stimulating their local economies, which will create more jobs, also with taxable incomes and more purchasing power from those new employees, as well. In many areas, this spending will also generate sales tax revenue that can help local governments.

I think the problem is in perspective. It's easy for many of us to understand that if you're broke and in debt, you will never get your debt paid simply by cutting expenses; you need to increase your revenue by getting a job, getting a better job, selling possessions, etc.

The wealthy seem to think that cutting spending is all that needs to be done, but they rarely, if ever, acknowledge the role of revenue in cutting deficits and debt because they lack real-life application of the concepts.
 

Past Member (0)
Sunday August 5, 2012, 3:38 pm
I would have loved to see some pro-Mitt commentary on this. Mitt's agenda is an impossible agenda. While he is claiming that the US doesn't spend enough on defense (US spends 4.8 percent of GDP whereas the European counterpart spends only 1.7 % of their GDP and even China spends only ~ 2% of their GDP), yet wants to continue on with Bush era tax breaks. When is the magical fairy that will provide this visit America and bestow these blessings on the nation.

From Stephen Walt's blog:

"Unfortunately, over the past forty years so-called conservatives in the United States have done a great job of convincing Americans that it is foolish, counter-productive, and even unpatriotic to pay taxes for the benefit of other Americans, while at the same time declaring that it is one's patriotic duty to pay taxes so that we can occupy other countries, build military facilities on every continent, and make it easier for Europeans, Asians, and others to live better under the umbrella of our protection. Unless, of course, you are really, really rich, and can hide a lot of your income in some nice offshore tax shelter. It's been a brilliant piece of salesmanship, but the results are exactly what one would predict: a gradual hollowing-out of the features that once made America the envy of the world, and a bunch of allies who aren't even all that grateful for the sacrifices made on their behalf."
 

Gloria picchetti (300)
Sunday August 5, 2012, 4:34 pm
Honestly? I heard on a Sunday talk show today that the national debt will be solved the end of his first term. I guess Santa Claus is leaving million dollar trust funds for every US citizen in his year three?
 

Seth E. (65)
Sunday August 5, 2012, 4:39 pm
Thanks for the star, Kit!

For the comment above with no name, in order to have gotten any pro-Mitt commentary, his supporters would actually have to be able to understand more about the concepts than just memorizing and quoting talking points, and since that's intellectually beyond most of them, I don't see it likely that they'd dare jump in just to be proven wrong.

Republicans aren't always the courageous sort, even if they try to make people think they are.
 

Past Member (0)
Sunday August 5, 2012, 4:45 pm
Sorry Seth that I am no name, but my identity keeps on disappearing every time I post. It is Marg M. that is posting.

 

Yvonne White (233)
Sunday August 5, 2012, 4:51 pm
LOL! Mitt must be a Super Politician - the size of the lies should be proportionate to the size of the Liar!:) Rich Liars can afford to super-size the lies!
 

Mary Donnelly (47)
Sunday August 5, 2012, 5:02 pm
Thanks Kit. Great post and comments. I am surprised that so many people seem to be taken in by wrong maths.
 

Seth E. (65)
Sunday August 5, 2012, 5:23 pm
No problem, Marg, and welcome! :)
 

Kit B. (276)
Sunday August 5, 2012, 5:45 pm

It's not wrong math, Mary it is intentionally deceptive math. If there is a sucker born every minute then there are Tea cups full of suckers.
 

Robert S. (115)
Sunday August 5, 2012, 7:56 pm
Paul Krugman - New York Times Blog
August 2, 2012, 12:18 pm113 Comments
Theses On Taxes

Some brief notes:

1. Neither candidate is offering a realistic tax plan, because the fact is that the federal government is going to need more revenue than either is currently proposing. But the two men are not equivalent in their unrealism: Obama is proposing to raise revenue by around $80 billion a year compared with current policy, while Romney is proposing to cut revenue by around $450 billion a year compared with current policy. Obama is inadequate; Romney is intensely, screamingly irresponsible.

2. On top of that, Romney is scamming voters, claiming not only that he can make up the lost revenue by closing unspecified loopholes, but that he can do so in a way that doesn’t shift the tax burden away from the rich onto the middle class. He can’t, as a matter of sheer arithmetic — which is the point of that Tax Policy Center study.

3. The Romney campaign isn’t even trying to make a substantive argument in response — they’re just calling names.

Even if you approve of Romney’s policy thrust, you should be appalled by the cynicism and contempt for voters on display.
 

Robert S. (115)
Sunday August 5, 2012, 8:00 pm
intensely, screamingly irresponsible...yup. That's what the man said. And yes, that the Tax Policy Center that Romney liked before they came out with this...
Now of course they are Liberally biased. Your Romney are truth challenged, and the world sees it.
 

Barbara Palau-Lipford (1067)
Sunday August 5, 2012, 8:02 pm
Great article~ Thank you Kit!
 

pam w. (191)
Sunday August 5, 2012, 8:50 pm
"Trickle down... reminds of something that happens when young children are learning "potty training", they often have a trickle down. "

++++++++++++++++++++++++++ Thanks, Kit! After many years of various politicians promising us that "trickle down" will be good for everyone, we STILL haven't seen the benefits....because it doesn't WORK for anyone except the wealthy!
 

Devon Leonard (54)
Monday August 6, 2012, 12:46 am
I don't trust him. He's a slippery character to me.
His family dog atop the car in a carrier..... His chasing after (with a bunch of other boys right beside him) that kid in boarding school who had longish bleached hair and actually saying.."it was just a prank that I cut his hair".
I don't even want to think about all his motives... I'm voting for Obama for four more years.
Thanks for the article Kit.
 

Georgia L. (208)
Monday August 6, 2012, 1:01 am
I think they(the big boys) know they are lying but with their stupid followers blaming decent wages for the crash it has been easy to keep pushing the lies. They want a return to the early 1900s where slave wages and child labor were plentiful.
 

Pamela D. (16)
Monday August 6, 2012, 6:23 am
Maybe Mitt has enough money in his overseas bank accounts to pay off the U.S. debt! He must be planning to suprise the nation when he releases his own tax returns! Of course, he must be Santa Claus!

Does he really think Americans are this stupid to fall for this tax plan!
 

Lloyd H. (46)
Monday August 6, 2012, 7:40 am
As predicted, Bush on steroids, feed the Plutocracy and starve the Democracy. The only reason that some of the numbers are not quite as bad as the Ryan/Repug/Tea Bagged Plutocrat Payout Budget is that as usual Willard 'The Rat' Romney leaves out the important details and specifics. The cuts go to the rich 2%, the bill goes to 98%.
 

JL A. (276)
Monday August 6, 2012, 9:27 am
seems that the GOP not only wants to disavow science in decision-making and policies but now also wants to disavow math...scary
 

jan b. (3)
Monday August 6, 2012, 11:41 am
Does anyone really believe that Romney ( with the backing of the ones like the Kochs or Trump) don't want to extend the tax cuts for THEMSELVES and CHEAT EVERYONE ELSE ??
Romney keeps money offshore on money made here to help other country's economies and we don't even KNOW how much money has left this country in that manner by corporations and the rich and you wonder then why we are going broke ?
Romney also uses a IRA to hide $100 million dollars in deferred earnings which is really supposed to be for the working people's retirement fund.
It's all legal but should it be ?? I don't think it should nor is it patriotic. Romney is not a patriot....nor a friend to women or gays. or dogs.
 

Angel Campbell (0)
Monday August 6, 2012, 2:09 pm
This is crazy.
 
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