“Let Me Count The Ways”: Would A Republican Candidate Lie About Taxes?
The United States faces a gigantic economic choice next year, and last night’s debate centered largely around what Mitt Romney would do about it. Romney’s plan is to lock the Bush tax cuts into place, reduce the long-term deficit entirely through spending cuts, enact an additional 20 percent tax rate cut that would disproportionately benefit the rich and cover the cost through unspecified closings of tax deductions. But Romney labored tirelessly, and with evident success, to portray himself in a far more egalitarian light. Every time President Obama described the cost of his tax rate cost, Romney dismissed it as untrue, pledged that his plan would not reduce the current tax burden on the rich, and even implied that he would make the rich pay higher taxes by closing their loopholes.
It was a virtuoso performance. But what does it tell us about how Romney would govern if elected? Here he was making promises about how he would govern that flatly contrasted with his plans. Which promises should we believe? Ross Douthat argues that Romney’s soothing moderate rhetoric shows that he is likely to govern as the moderate he presented himself as.
It’s worth considering a similar — in many ways, identical — episode that took place a dozen years before. During the 2000 election, the growth of a budget surplus offered the country a major choice. Al Gore proposed to use most of the surplus to retire the national debt and the balance for public investment. George W. Bush proposed a large, regressive income tax that Gore warned would exacerbate inequality and jeopardize the soundness of the budget.
Then, as now, the Republican simply denied over and over that his plan would do what the Democrats said it would. Bush portrayed his plan as devoting just a small fraction of the surplus to tax cuts and described his tax cut itself as benefitting the poor far more than the rich. And you certainly could find circumstantial evidence to suggest that Bush might govern the way he portrayed himself, rather than the way his plan read. He had governed in a bipartisan way in Texas, he had explicitly denounced the conservative wing of the Congressional GOP, and he had surrounded himself with moderate advisers like Michael Gerson and Karen Hughes.
But Bush in fact followed through on what his plan actually did, which happened to be what Gore described it as, and not what Bush described it as. His promises to maintain the budget surplus and direct most of the tax cuts to lower-earners fell by the wayside. What mattered was the party, and the Republican Party was committed to a policy of regressive tax cuts.
The Bush-Gore debates centered primarily around Gore’s endless, frustrating attempts to pin down Bush’s priorities. I compiled pieces of Bush denying he would pursue what turned out to be the centerpiece of his administration’s economic agenda.
Here’s Bush in the first presidential debate:
I want to take one-half of the surplus and dedicate it to Social Security. One-quarter of the surplus for important projects …
tonight we’re going to hear some phony numbers about what I think and what we ought to do. …
this is a man who has great numbers. He talks about numbers. I’m beginning to think not only did he invent the Internet, but he invented the calculator. It’s fuzzy math. It’s a scaring — he’s trying to scare people in the voting booth. Under my tax plan that he continues to criticize, I set one-third. The federal government should take no more than a third of anybody’s check. But I also dropped the bottom rate from 15% to 10%. Because by far the vast majority of the help goes to people at the bottom end of the economic ladder. …
After my plan is in place, the wealthiest Americans will pay a higher percentage of taxes then they do today…
Let me tell you what the facts are. The facts are after my plan, the wealthiest of Americans pay more taxes of the percentage of the whole than they do today.
First of all, that’s simply not true what he just said, of course. And secondly, I repeat to you —
MODERATOR: What is not true, Governor?
That we spent — the top 1% receive 223 as opposed to 445 billion in new spending. The top — let’s talk about my tax plan. The top 1% will pay one-third of all the federal income taxes. And in return, get one-fifth of the benefits, because most of the tax reductions go to the people at the bottom end of the economic ladder. …
GORE: I think that what — I think the point of that is that anybody would have a hard time trying to make a tax cut plan that is so large, that would put us into such big deficits, that gives almost half the benefits to the wealthiest of the wealthy. I think anybody would have a hard time explaining that clearly in a way that makes sense to the average person.
BUSH: That’s the kind of exaggeration I was just talking about. (LAUGHTER)
But the top 1% will end up paying one-third of the taxes in America and they get one-fifth of the benefits.
Under my plan, if you make — the top — the wealthy people pay 62% of the taxes today. Afterwards they pay 64%. This is a fair plan. You know why? Because the tax code is unfair for people at the bottom end of the economic ladder. If you’re a single mother making $22,000 a year today and you’re trying to raise two children, for every additional dollar you earn you pay a higher marginal rate on that dollar than someone making $200,000, and that’s not right. So I want to do something about that.
By: Jonathan Chait, Daily Intel, October 4, 2012
“The Rise Of The Super Rich”: GOP Congress Really Does Make The Rich Richer
Are you rich and want to get richer? Vote Republican! The stronger the GOP is in Congress, the larger the share of wealth the top 1 percent controls, according to a new study in the October issue of American Sociological Review, which confirms what we figured all along — there’s a direct connection between the rightward shift of Congress and the upward advance of the richest Americans’ net worths.
From 1949 through 2008, the impact of a 1 percentage point increase in the share of seats held by Republicans in the House (a little over five seats) raised the top 1 percent’s income share by about .08 percentage points.
“At first glance, this might seem negligible,” said Thomas Volscho, a sociologist at CUNY-College of Staten Island who co-authored the study. But it’s not. “Given that the estimated national income in 2008 was more than $7.8 trillion, an increase of only 1 percent in Republican seat share would raise the income of the top 1 percent by nearly $6.6 billion. That equates to about $6,600 per family in the top 1 percent.”
The ASR study, “The Rise of the Super-Rich,” looks at the experience of the 1 percent from just after World War II to 2008 and identifies several other factors that have propelled the top tier’s rise. The fact that the uber wealthy have gotten richer much faster than lower-income brackets has been well documented and helped spark the Occupy movement, but this research looks at the role that policy and other variables have played.
Beyond politics, Volscho and Kelly found that the decline of private-sector union membership, and the increasing financializing of the economy — which has heightened the impact of financial-asset bubbles — were also key contributors to income inequality and the rise of the 1 percent. Over the 60 years the paper studied, a 1 percentage point decrease in union membership among private sector workers was linked to a more than 0.4 percentage point increase in the income share of the super-rich.
But the most surprising finding of the study may be the impact a GOP Congress has on income inequality. “Based on our analysis, Democrats appear to favor an economic system that produces more egalitarian outcomes even before any redistribution occurs,” the study concludes. “In essence, the market is not completely beyond the influence of politics and policy, and it is not just in the realm of explicit redistribution that political parties produce divergent distributional outcomes. Political decisions in part ‘make the market.”
Interestingly, the party affiliation of the president did not significantly impact the wealth share of the top 1 percent. Volscho told Salon he was surprised by that finding. Instead, it’s Congress that has the bigger impact. “It was surprising, but not. Because if you look at, in 1995, the Republican takeover over Congress, that’s when you started to see the spike in the top 1 percent,” he said. “They had been doing well since around 1980, but not as well as around 1995. And the stock market boom started in 1995 as well, but we took that into consideration and that had an independent effect.”
The study doesn’t get into specific policies that impact income inequality much, calling for further research on the subject, but it doesn’t take a Ph.D. to make some pretty good guesses. Republicans (with help from Democrats, no doubt) have pushed tax cuts that disproportionately impact the wealthy, opposed redistributive programs, decreased financial regulation, which allowed for the explosion of financial speculation, cut education funding, etc. “There are so many things, appointments, heads of agencies, mundane policies and regulations that filter down from Congress into government agencies that potentially can aid the very rich,” Volscho said.
But a Republican president like Mitt Romney could help in that they would “make that pro-1 percent legislation flow through so much quicker,” Volscho said. Of course, this isn’t too surprising — polls consistently show that Americans think Romney and the GOP would do more to help the wealthy. Now social science shows they’re right!
By: Alex Seitz-Wald, Salon, October 2, 2012
“True Perversity”: Mitt Romney’s Obscene Posturing As A Wall Street Critic
Among the many obfuscations of Mitt Romney last night, this was perhaps the biggest laugher of them all:
ROMNEY: Dodd-Frank was passed, and it includes within it a number of provisions that I think have some unintended consequences that are harmful to the economy. One is it designates a number of banks as too big to fail, and they’re effectively guaranteed by the federal government. This is the biggest kiss that’s been given to—to New York banks I’ve ever seen. This is an enormous boon for them. There’s been—22 community and small banks have closed since Dodd-Frank. So there’s one example I wouldn’t designate five banks as too big to fail and give them a blank check. That’s one of the unintended consequences of Dodd-Frank. It wasn’t thought through properly.
Romney—the private equity veteran running a presidential campaign funded by Wall Street, on a platform that contains a full repeal of every financial regulation over the past four years—positioning himself as an opponent of those big “New York banks” was a historic moment in presidential debate cravenness. (And a real missed opportunity for Obama to wallop his opponent).
So what exactly was Romney talking about? It’s a complicated answer, but understanding it reveals the true perversity of Romney’s posturing.
Dodd-Frank has two provisions regarding too-big-to-fail that Romney is talking about here. The first is the ability of the Financial Stability Oversight Council, created by the legislation, to name financial institutions “systemically significant.” This means they are so big that their failure could threaten the health of the financial sector, and that designation subjects them to heightened regulation and higher capital requirements.
The big banks hate this requirement, for obvious reasons—they come under increased scrutiny and restrictions. So Republicans have been dutifully attacking it. (Romney’s running mate, Representative Paul Ryan, repeatedly blasted it before joining the ticket). The GOP argument, as you heard Romney deliver it, is that by giving them the “systemically significant label, the government is officially “designating” banks as too-big-to-fail—a very bad-sounding thing indeed!
But this is nonsense—these firms are too big to fail. The FSOC designation doesn’t make them so, and is in no way a “kiss” to the big banks—again, it subjects them to higher regulation. Romney and his party would prefer to repeal this provision, full stop, and thus effectively stick their heads in the sand about too-big-to-fail institutions. It’s like saying a doctor who diagnoses someone with cancer has given it to him.
Interestingly, a key feature of this provision is that FSOC can name non-banks as systemically significant, and just this week news broke that AIG is on the verge of receiving this label. Republicans on the House Financial Services Committee have been trying to amend Dodd-Frank to protect AIG from that designation, which to me raises an interesting question about Romney’s timing here.
In any case, when Romney spoke about “guaranteeing” a bailout, and of “blank checks,” he’s echoing another GOP complaint about the resolution authority provision of Dodd-Frank. That gives the federal government the power to wind-down big banks in the event of a failure. The idea is to dissolve the bank, without taxpayer money, not save it—Rep. Barney Frank has called this a “death panel” for big banks. (Pat Garofalo wrote on this issue for us here).
Banks also hate this provision, preferring instead the inevitable ad hoc, blank-check bailout that we saw in 2008. So Republicans have been going after resolution authority—the 2012 Ryan Budget would repeal it—by arguing that the provision somehow guarantees bailouts. This is the same flim-flam as before: the bailout is going to happen either way if the firm is too big to fail, and by repealing resolution authority, you take away the increased power of the government under Dodd-Frank to deal the problem. (Former Treasury Secretary Hank Paulson said he “would have loved to have had” resolution authority in 2008 instead if issuing straight-up bailouts).
Many progressive critics have legitimate complaints about the failure of Dodd-Frank to be tougher in dealing with too-big-to-fail firms, but to be absolutely clear, that’s not what Romney and the Republicans are trying to do. They’re trying to get rid of the limited reforms that have been made. To do it while preening as tough-on-Wall-Street politicians is deeply, deeply cynical.
By: George Zornick, The Nation, October 4, 2012
“Meaningless Assurances”: Mitt Romney’s Short-Lived Immigration “Dream”
Mitt Romney raised eyebrows this week with an apparent Etch A Sketch on immigration policy: after months of silence on President Obama implementing many of the goals of the DREAM Act through deferred action, the Republican said he wouldn’t deport immigrant youths who are currently taking advantage of the administration’s policy.
That sounded like a step in a more progressive direction, but it left unanswered questions, most notably whether a Romney-Ryan administration would leave the existing policy in place.
Dreamers” being helped by Obama now would be temporarily secure, but what about in the near future?
Today, we got an answer.
Mitt Romney would not revoke temporary deportation exemptions granted to young illegal immigrants under an executive action by President Obama, but he also would not issue new protective documents if elected. […]
Responding to a Globe request to clarify Romney’s statement to the Denver Post, Romney’s campaign said he would honor deportation exemptions issued by the Obama administration before his inauguration but would not grant new ones after taking office.
That means the number of people who would benefit from Romney’s non-reversal could be minute.
Suddenly, Romney’s move towards a moderate posture looks a whole lot less impressive.
In practical terms, what the Republican is saying here is that those who’ve already received a temporary exemption from deportation can stay until that reprieve expires after two years. But that’s literally it — no other exemptions will be issued, no other immigrants will be protected, no future extensions will be made.
To hear Romney tell it, everything will work out fine — he’ll get elected, convince Congress to pass a “full immigration reform plan,” sign it, and everyone’s needs will be met.
But since he still refuses to tell anyone what’s in his “full immigration reform plan,” the assurances are meaningless.
By: Steve Benen, The Maddow Blog, October 3, 2012
“Crying Fraud, Then Creating It”: Republicans, The Villains Of Their Own Conspiracy Theories
For once, the Republicans were right.
They have been obsessively claiming that voter-suppression measures are necessary because of widespread “ballot fraud.” However extensive investigations by the mainstream media have shown that ballot-fraud is a convenient myth.
Even the Bush administration, in an extensive five-year search, turned up no evidence of the kind of voting fraud—fake IDs, voting in the name of dead people, folks being bribed to vote—that the Republicans routinely allege. Republicans, evoking the tactics of the pre-civil rights segregationist South, simply want to make it more difficult for people who might support Democrats to exercise their right to vote. Some five million people, mostly minorities and the poor, are at risk of being denied their right to vote in 19 states controlled by Republican governors and legislatures, according to a report from the Brennan Center. Happily, the courts have struck down the most extreme of these measures, in Texas, Ohio, Wisconsin, Florida, and most recently Pennsylvania.
Now, however, Republicans can claim some vindication. Serious voter fraud has emerged in Florida. But the ballot fraud is being perpetrated by Republicans!
The Florida GOP had hired a firm with a very sketchy record, called Strategic Allied Consulting. And guess what? The firm tried to register dead people! It also refused to register live people who tried to register as a Democrat or an independent.
An embarrassed party turned over evidence to state prosecutors and fired the firm.
But, hey, the Republicans should be pleased. They’ve now demonstrated, at long last, that ballot fraud does exist. Of course, the remedy is not suppression of legitimate voting, but prosecution of fraudsters. They seem to exist only on the Republican side.
By: Robert Kuttner, The American Prospect, October 3, 2012
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