“What Do Republicans Want?”: President Obama Couldn’t Have Been Any Clearer, And He Won
As we head into negotiations on the Austerity Trap (better known by the inaccurate moniker “fiscal cliff,” which I refuse to use), there’s a clear narrative emerging. This narrative has it that Democrats want to see taxes increase on rich people, which Republicans aren’t happy about, while Republicans want to see entitlement “reform,” which Democrats aren’t happy about. So once everybody gives a little, and Republicans accept some tax increases for the rich while Democrats accept some “reform” of Social Security and Medicare, then we can have a happy ending.
The problem with this is that while the Democrats’ position is quite clear—the Bush tax cuts should expire for income over $250,000—the Republicans’ position is extremely vague, on both the tax side and the entitlement side. Let’s take taxes first. A bunch of Republicans are being praised for their willingness to violate Grover Norquist’s pledge to Never Raise Taxes In Any Way Ever Never Ever. Yet they’re remaining steadfast that tax rates must stay the same, while allowing that maybe we can trim some deductions for the wealthy. As Steve Benen points out, some are acting like these Republicans are being generous for essentially taking the position that they support Mitt Romney’s tax plan. Perhaps they’re assuming that the wealthy will be able to cleverly evade any limitation on deductions, so it won’t make a difference to their primary constituency. But in any case, we haven’t heard them take a specific position. Are they proposing a hard cap on all deductions? Eliminating certain deductions while keeping others? We don’t yet know.
Then we get to the price Republicans are going to want to exact for any agreement to stop the Austerity Trap, and this is where they’re vague. They want “reform” of entitlements. What is “reform,” you ask? Well, nobody ever says. The reason is that Republicans know perfectly well that the things they would like to do to Social Security and Medicare are unpopular. We can dispense with Social Security quickly: The program is basically fine, and you could eliminate future shortfalls in benefits with some minor tweaking of the financing, like raising the income cut-off for Social Security taxes, which is currently at $110,100. But the real budgetary challenge is Medicare.
You may remember that when Paul Ryan joined the Republican ticket, a lot of attention was paid to his Medicare plan, which would essentially turn Medicare from an insurance program into a voucher program, in which seniors would try to find affordable insurance coverage from private insurance companies. You may also remember that he and Romney quickly stopped talking about it and turned to accusing Barack Obama of cutting Medicare by $716 billion, heartless enemy of the welfare state that he is. This should remind us of two things: First, the “reform” that Republicans want in Medicare is to privatize it and end its guarantee of health coverage; and second, that only one party has reformed Medicare. That reform, also known as Obamacare, not only found hundreds of billions of dollars in savings but also moved toward changing the payment structure (away from fee-for-service and toward rewarding providers for making and keeping patients healthy) and included a lot of pilot programs that could reduce costs in the future.
This debate is just getting started, so perhaps it’s not so terrible that Republicans have been so unclear about what specifically they want. But they shouldn’t be allowed to get away with it for long. Let’s also not forget that we had something of a referendum on all these questions earlier this month. Barack Obama couldn’t have been clearer that he wanted to raise taxes on the wealthy and didn’t want to voucherize Medicare. And he won.
By: Paul Waldman, Contributing Editor, The American Prospect, November 25, 2012
“Take That Turkey Off The Table”: The Bush Tax Cuts For The Wealthy Are Un-American
Reading about the historic Johnstown flood of 1889 brought to mind the Bush tax cuts for the wealthy—and why the president must rid us of them now as the nation starts a new season, thankful yet sober.
The 1 percent of that era were the robber barons of the Gilded Age, with great steel, coke, and railroad wealth concentrated in Pittsburgh. They started an exclusive club, several industrial barons, including Andrew Carnegie, devoted to fishing and hunting, by the South Fork Dam. The dam the club constructed nearby overlooked several towns and villages in the rugged incline and valley below. On a terribly rainy spring day when the dam broke, an entire lake drowned those towns in torrents of water, debris and floating trees, and houses. Because the fancy club’s earthen dam was shoddy, roughly 2,200 people died in the worst natural disaster to befall an American town up to that point.
The robber barons’ summer recreation endangered the whole community’s safety and livelihood. People talked about the dam breaking all the time before it did. And that’s what I’m talking about. For too long we have lived under the yoke, under the treacherous dam of putting really rich people first. To recover from our own economic calamity, those tax cuts must be scrubbed, along with everything with George W. Bush’s name on it. Let it not be forgot, he’s the guy that took peace and prosperity and turned it all into desert dust and debt.
Taking that turkey off the table would not upset most wealthy people, who were content to live under the Clinton tax code. That is what President Obama wishes to do, but he has been thwarted once before by stubborn Republicans. This time around, he seems to have more mettle about getting rid of the significant tax break the rich have received, just for being rich. It will also bring substantial revenue badly needed by the Treasury. I grant you, there are hedge fund managers out there who see it differently than you and me.
As we mark the autumn harvest in a collective ritual that brings comfort, let’s resolve to rid ourselves of the most divisive policy remaining from the Bush years. A policy that is, in the end, unfair and un-American. And life will start looking up.
By: Jamie Stiehm, U. S. News and World Report, Washington Whispers, November 20, 2012
“Populist Mitt”: Does Romney Want to Raise Taxes On The Wealthy?
At last night’s debate, the mathematical impossibility of the Romney tax plan came up, just as it did during the first Obama-Romney debate, and just as it surely will in the second Obama-Romney debate on Tuesday. The real problem with Romney’s proposal, though, isn’t just that it’s mathematically impossible, but that it’s logically strange in one important way nobody seems to have noticed yet, namely that Romney seems to be proposing big tax increases for the wealthy. I’ll get to why that is in a minute, but before I do let’s review the problem. Since Kevin Drum gave a nice explanation, I’ll just steal it:
Romney has promised a 20 percent across-the-board rate cut, which includes people making over $200,000 per year. This would reduce tax revenues by about $251 billion per year.
But wait! What about the economic growth this will unleash? That’s mostly mythical, but let’s bend over backwards here. If you incorporate the growth estimate of one of Romney’s advisors, Greg Mankiw, Romney’s rate cuts would only cost about $215 billion per year.
Next, try to pick out a set of deductions and loopholes that can be closed to make up for this revenue loss.
But wait! Romney hasn’t said exactly which deductions he would target. So it’s not fair to pick and choose specific deductions. Fine. Instead, let’s assume that Romney completely eliminates every single deduction for high earners. All of them. It turns out this would make up $165 billion per year.
So even under the best possible assumptions, Romney’s plan would cut taxes on the rich by $50 billion per year.
But Romney says he won’t cut taxes on the rich.
If you want a lengthier explanation of all this, Josh Barro gives it here. To sum up: Romney’s now-emphatic promise that he won’t cut taxes for the wealthy (“I cannot reduce the burden paid by high-income Americans,” he said during his debate with Obama, “So any — any language to the contrary is simply not accurate”) is just impossible to keep if he’s actually going to also reduce their taxes by 20 percent. And that’s where we get to the crazy part. Here’s what I would ask Mitt Romney if I had the chance:
You say you want to cut income tax rates for everyone, and pay for every penny by eliminating rich people’s deductions and loopholes. So if you’re paying for it by getting more money from the rich, that means the rich’s taxes are going up. If rich people’s taxes were staying the same under your plan, we wouldn’t be getting the money to pay for the across-the board rate cut for everyone. You keep saying wealthy people won’t see a tax cut, but what you’re actually proposing is a tax increase on the wealthy. That being the case, why go through this double bank-shot of cutting the rich’s income tax rates, then going after their deductions? If what you’re proposing is to raise taxes on the rich, why not just raise taxes on the rich, say by raising their income tax rates?
I suppose if somebody asked Romney this, he’d deliver some convoluted explanation involving tax simplification (a reasonable goal in itself, but beside the point) and the explosion of growth that will come from a tax cut. But that wouldn’t make sense either—if all those “job creators” are getting their taxes increased, won’t that hamper their ability to do their divine job-creating work? Because as Republicans never tire of telling us, if you raise taxes on job creators, the economy inevitably goes down the toilet.
So how do we account for the logical conundrum of Mitt Romney’s tax plan? Someone would have to go back and check, but I’m guessing the whole thing evolved piecemeal, in a combination of actual proposals somebody sat down and worked out, and rhetorical moves Romney made in both planned and extemporaneous contexts. After proposing the 20 percent rate cut, at some point he started promising not to cut taxes for the wealthy because he didn’t want to seem like the plutocrat the Obama campaign is making him out to be, and that backed him into a corner he now can’t get out of. I haven’t seen anybody ask him about the fact that he’s actually proposing raising taxes on the rich, even though that’s what he’s doing. Maybe when someone does, he’ll embrace his new populist self.
By: Paul Waldman, Contributing Editor, The American Prospect, October 12, 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
Giving Specifics Would “Take Me Too Long”: Paul Ryan Is Not In The Mood For Truth Telling
On Fox News Sunday, Rep. Paul Ryan claimed that Americans don’t know enough about what a Romney-Ryan presidency would do, which explains the campaign’s current troubles. But when Chris Wallace pressed Ryan to discuss the specifics of the Romney-Ryan tax plan, the mathematics of which have confounded non-partisan experts, he refused even to say how much the tax cuts the ticket has proposed would cost.
Everyone expects Mitt Romney to bob and weave around basic questions he doesn’t want to answer. But Ryan makes such a show about telling hard truths. Turns out Ryan’s self-righteousness has mainly served to make it more insulting when he bobs and weaves himself.
“It would take me too long to go through all of the math,” Ryan explained Sunday morning. But Wallace wasn’t asking for “all” of the math, just basic numbers. As usual with the GOP ticket, the only specific figure Ryan wanted to discuss was how much he and Romney want to drop tax rates. Wallace repeatedly asked Ryan whether Romney’s proposed tax cuts would cost $5 trillion, a question meant to establish one side of the budget equation before moving to a discussion of how Romney would pay for the cuts. But Ryan repeatedly refused to go through the addition and subtraction, instead insisting that the numbers eventually come out in his favor — Romney’s proposed tax cuts would cost nothing, he said, because Romney would offset them by cutting loopholes, primarily for upper incomes.
But which loopholes, and where does Romney draw the line between middle- and upper-income Americans? Ryan had nothing too specific there, either. The best he could do was repeat the nice-sounding logic of the Romney-Ryan plan:
You can lower tax rates 20 percent across the board by closing loopholes and still have preferences for the middle class for things like charitable deductions, home purchases, for health care. What we’re saying is people are going to get lower tax rates and therefore they will not send as much money to Washington.
Wallace went on to ask Ryan what Romney’s highest priority would be if the GOP ticket’s tax plan didn’t turn out to be revenue-neutral. Ryan answered that “keeping tax rates down” is “more important than anything.” Since Ryan kept insisting that he and Romney need not make a choice between tax cuts and, say, controlling the deficit, he probably didn’t mean for his statement to sound ominous. But since he merely said — and did not show — that Romney’s math could add up, ominous his statement was.
Wallace should have followed up with a question about how, even if Romney and Ryan managed to cut taxes and kept federal revenue where it is, they could then plausibly fix America’s long-term budget mess without additional money. Then again, Ryan didn’t seem to be in the mood for any hard truth-telling.
By: Steven Stromberg, The Washington Post, September 30, 2012
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 