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View Diary: Stephen Colbert destroys Romney's tax plan with one simple question (235 comments)

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  •  Reagan actually did this in 1986. (1+ / 0-)
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    The theory that Romney and Ryan are espousing is the same as the theory behind the 1986 tax reform act. (not to be confused with Reagan's first round of tax cuts in 1981)  The idea is that if you lower rates and limit deductions, you are promoting economic efficiency, and you are reducing government interference with people's economic decisions. And the whole idea is for the plan to be revenue neutral, which is how it got passed on a bi-partisan basis in 1986.

    What is interesting to contrast between Reagan's plan and Romney/Ryan's plan is that one of the main ways that Reagan got to that revenue neutral place was to INCREASE the taxes on capital gains. Reagan was a simple guy, and one of the simple things that you have to love about him was that he never understood the rationale for taxing unearned income at a lower rate than earned income. Maybe that's because he actually worked for a living for most of his life.

    But Romney's plan is to keep capital gains rates very low, and also corporate tax rates, and also to kill the estate tax. And because he is planning all that, it is very hard to keep his plan revenue neutral, and it's also impossible to prevent his plan from having the effect of taking more from the middle class, and less from the wealthy.

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