“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
“A Stark Election Choice”: Study Measures Mitt Romney’s Plan To Screw The Poor And Sick
The largest and clearest point of distinction in the presidential race is universal access to health insurance. If President Obama wins reelection, his law to provide access to the uninsured will go forward. If Mitt Romney is elected, it will be gutted, and Medicaid — the bare-bones coverage plan for the most desperately poor and sick — will face enormous additional cuts.
Commonwealth Fund has released a report comparing the stark choice. Estimating conservatively, Romney’s plan — to the extent that the report was able to piece it together — would increase the uninsured population to about 72 million, while Obama’s would cut it to 26 million (his plan does not cover illegal immigrants.) Probably more telling is Romney’s official campaign reaction:
“Under ObamaCare, Americans have seen their insurance premiums increase, small businesses are facing massive tax increases, and seniors will have reduced access to Medicare services,” Ryan Williams, a Romney spokesman, wrote in an email to POLITICO. “The American people did not want this law, our country cannot afford this law, and when Mitt Romney becomes president he will repeal it and replace it with common-sense, patient-centered reforms that strengthen our health care system.”
Note that the statement is almost entirely an attack on Obamacare, with a brief clause at the end vaguely promising something good will take its place. But that something requires resources. Most people lacking insurance are either sick or have a sick family member or they’re poor. If you want to cover them, you need to cough up some money. Obamacare undertook the massive political heavy lift of providing those resources, and that’s what Romney attacks — he included higher taxes on “small businesses” (i.e., people making more than $250,000 a year) and “reduced access to Medicare services” (i.e., cuts in reimbursements to Medicare providers, as a trade-off for providing them with 30 million new paying customers.)
Romney’s budget is premised on denying the government enough resources to fund any kind of universal health insurance program. His promise to cut tax rates by 20 percent would reduce tax revenue well below current levels. But even if you accept Romney’s arithmetically impossible claim that he can cut tax rates by 20 percent and raise the same tax revenue as the tax code does right now (and without raising taxes on the middle class), merely holding revenue at current, Bush-set levels would make any kind of universal coverage impossible.
Both campaigns describe the election as a stark choice, and this is correct. It’s a choice between universal health coverage for legal citizens and preserving the Bush tax cuts.
By: Jonathan Chait, Daily Intel, October 2, 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
“Romney’s Personality Shift”: Overnight He’s A Practical Moderate, Terribly Concerned About The Middle Class
The strangest aspect of Wednesday night’s debate was Mitt Romney’s decision to change his tax policies on the fly. Having campaigned hard on a tax proposal that called for $5 trillion in tax cuts, he said flatly that he was not offering a $5 trillion tax cut.
“I don’t have a tax cut of the scale that you’re talking about,” Romney said, even though that is exactly the tax cut he has proposed.
Was Romney for his tax plan before he was against it?
Romney’s willingness to remake himself one more time brought into sharp relief a central flaw of his candidacy: Having campaigned as a moderate when he ran for governor of Massachusetts, he veered sharply to the right to win the Republican presidential nomination. Now, with the election just weeks away and polls showing him falling behind in the swing states, he has decided that he needs once again to sound moderate, practical and terribly concerned about the middle class — and that is the person he sought to be in Denver.
The candidate who has repeatedly attacked regulations was quick to insist: “Regulation is essential. … You have to have regulations so that you can have an economy work.” Romney then reiterated his criticism of the Dodd-Frank Wall Street reform legislation. But this scourge of big government during the primaries took care to let everyone know that he was not about to turn the United States into an Ayn Rand utopia.
Having hidden his Massachusetts health care plan behind “Repeal Obamacare” rhetoric in the primaries, Romney warmly embraced his own plan — without explaining why repealing a national health care system modeled on his plan would in any way be consistent with his sloganeering against the president’s central achievement.
Romney certainly proved his ferocity in Denver, drawing on the persona that had dispatched Newt Gingrich during the primaries. He relentlessly attacked President Obama on the economy, the budget deficit, health care and just about anything else the president has touched. Romney repeatedly used the word “crushed” to describe the impact of the president’s policies on Americans’ well-being.
“We know that the path we’re taking is not working,” Romney said late in the debate. “It’s time for a new path.”
In the early going, Obama seemed reluctant to go on offense and backed away from several opportunities to engage Romney. The president appeared far more interested in explaining than attacking, more concerned with scoring policy points than raising larger questions about his opponent’s approach. The words “47 percent” did not come up.
Obama did return repeatedly to a central point: Romney’s vagueness in his proposals on taxes and health care. He charged that Romney was hiding the details of those plans because they would prove unpopular with and harmful to the middle class. Several times, using different language, Obama effectively asked: If Romney’s ideas were genuinely helpful to average voters, wouldn’t he be shouting their particulars from the rooftops? And at several points Obama spoke of the baleful impact that the budget cuts proposed by Rep. Paul Ryan, Romney’s running mate, would have on Medicare, student loans and community colleges.
Still, Obama chose not to put Romney on the defensive, instead telling voters what he himself had done and why. Obama was more deferential than Romney was to moderator Jim Lehrer and was more willing to let Lehrer interpret the remarkably loose debate rules.
Only in the last minutes did Obama find a stronger voice in describing his achievements. He contrasted his willingness “to say no to some things” with Romney’s refusal to say no to “the more extreme parts of his party.”
Romney entered the debate facing a skeptical pundit class and a party faithful that perceived his campaign as floundering. This he reversed on Wednesday. By going on the attack, he won himself strong press notices and shouts of joyous relief from his own camp. Obama, by contrast, surprised many of his supporters by not even repeating criticisms of Romney he has made in his own stump speeches.
But Romney’s relentlessness may not play as well with swing voters. His decision to change his tax plan on the fly, rather than to defend it, will provide fodder for further Obama attack lines on how it would affect middle-income voters. And his obvious pivot to a new political persona — or, perhaps more precisely, his reversion to his older, more moderate self — will lead to more questions about who the real Mitt Romney is.
BY: E. J. Dionne Jr., Opinion Writer, The Washington Post, October 4, 2012
“Take All The Time You Need”: President Obama Should Simply Ask Mitt Romney To “Go Through All The Math”
Paul Ryan revealed every bit as much about the agenda of a Romney-Ryan ticket in his Sunday interview with Fox News as Mitt Romney did in his speech to that now-infamous fundraising event in Boca Raton.
Ryan acknowledged during a very long and very painful interview with Fox’s Chris Wallace that nothing matters to a Republican ticket populated by sons of privilege than lowering taxes for sons of privilege.
WALLACE: [What’s] more important to Romney? Would he scale back on the 20 percent tax cut for the wealthy? Would he scale back and say, OK, you know, we’re going to have to raise taxes for the middle class? I guess the question is what’s most important to him in his tax reform plan?
RYAN: Keeping tax rates down. By lowering tax rates, people keep more of the next dollar that they earn. That matters. That is incentives. That’s pro-growth policy. That creates 7 million jobs. And what should go first…
WALLACE: So that’s more important than…
RYAN: That’s more important than anything.
Cutting taxes for the rich is “more important than anything.”
More important than creating jobs.
More important than renewing manufacturing.
More important than maintaining Social Security, Medicare and Medicaid.
More important that reducing deficits.
More important than addressing debts.
“More important than anything.”
That’s a striking statement of anti-tax absolutism that goes far beyond any agenda Ronald Reagan or most of the great conservative leaders of the past would have dared to advance. And it defines the Republican ticket every bit as thoroughly as did Mitt Romney’s remarks at the fundraising event in Boca Raton.
Romney said to the wealthy donors who had gathered to provide the money needed to elect a Romney-Ryan ticket:
There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it—that that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what.… These are people who pay no income tax.… my job is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.
So Romney does not “worry about those people.”
But that is just part of the equation. It prompts another question:
Who would a Romney-Ryan administration worry about?
Ryan has provided the answer: the recipients of the Bush-Cheney tax cuts, who for a decade now have enjoyed the benefits of a redistribution of the wealth upward so sweeping that it has opened a yawning gap between rich and poor.
That’s a political position that Ryan has every right to take. And there is no reason to doubt that he is sincere—as sincere as Mitt Romney was when he said it was not his job to worry about the 47 percent of the American population that has been on the losing end of that redistribution of the wealth upward.
But it is, as well, a position that President Obama and Vice President Biden have every right—and, arguably, every responsibility—to discuss.
When he was being interviewed by Wallace, Paul Ryan was asked to explain the details of his economic agenda. He replied, “It would take me too long to go through all of the math.”
That caused a bit of an outcry.
Ryan responded by telling Milwaukee radio talk show host Charlie Sykes: “I like Chris; I didn’t want to get into all of the math on this because everyone would start changing the channel.”
Ryan argued that “when you’re offering very specific, bold solutions, confusion can be your enemy’s best weapon.”
On Wednesday night, Barack Obama and Mitt Romney will take the stage for the first debate between the major-party presidential nominees.
The debate could go anywhere.
The candidates have a good deal of freedom to provide direction.
Perhaps President Obama should simply open up with a simple restatement of what Romney and Ryan have said about dismissing the most vulnerable half of Americans while pouring their energies into maintaining tax breaks for a very wealthy and very politically connected few. Then, on the assumption that an hour and a half might be enough time to “go through all the math,” the president might invite Mitt Romney to take all the time he needs to explain an economic agenda that certainly sounds like a plan to “take” from the 99 percent and “give” to the 1 percent.
By: John Nichols, The Nation, October 2, 2012
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