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I heard two things from Romney in the town hall debate that deserved a direct response, but didn't get one.  They may be too mathematical to fit the format of a debate, but they shouldn't be forgotten as the campaign progresses.

Romney gave details of his plan that were literally true, but whose implication was unclear to the public.  The net result is that he proposes that the rich get richer, and that his own taxes go to near zero.

Romney's purported answer to middle class angst was telling, as it had nothing to do with the middle class. He said that his tax plan did away with taxes on dividends, interest, inheritance, and capital gains.  This is obviously not how the middle class makes their money.  That he could even bring this up as a middle class issue was frightening -- how detached from reality is he?

Middle class people have "earned" income.  Here in Massachusetts, that's taxed at half the rate of "unearned" income, the stuff that Romney wants to make tax-free at the federal level.  If you're a very wealthy person, though, living off of investment income, you don't have "earned" income, the stuff that today is federally taxable at up to 38% or so.  You have capital gains, taxed at 15% if you've held the asset for over a year, and you have dividends, which Bush changed from ordinary income to 15% income, and you have interest, which I think is still taxed as ordinary income though it's probably easy to call it a dividend.  

Romney wants to lower the rate on that 15% income to 0, and to do away with the inheritance tax, which is money you get for your great skill of choosing rich parents or relatives.  (It worked for Mitt.)  Since he is "retired" from both Bains, he would have approximately zero taxable income under his own plan!  If however he were elected President, he'd probably owe tax on his $400k salary, and on certain other non-sheltered income, like book royalties.  But they're a pittance compared to his unearned income.  So his net rate would probably be around 1%.

But that's the old news; we've heard that here before.  What he also said today was even more surprising.

He said that his tax plan would lower the tax rate, but would collect the same percentage from the rich as the present rates get, not that their average tax rate would remain the same.  He said that 60% of taxes come from the rich today, and 60% would under his plan.  Now if you think about the math, there's one easy way for that to be true.  Let's say that the tax rate on the 47% is raised a little, that the tax rate on the 51% (that is, the upper half of the 99%) is raised a lot (by doing away with important deductions like health insurance and mortgage interest), and that the tax rate on the tippy-top goes down.  The tippy-top pays the same share of total taxes if its share of income rises even faster!  So what Romney's telegraphing is an increase in the Gini coefficient, which measures inequality.  He's telegraphing a further hollowing out of the middle class, and a much greater concentration of wealth in the top 0.1%.  That way, a lower tax rate will still pay 60% of the total, because nobody else will be making jack squat.

That's why they're Banana Republicans.  They won't be satisfied until the United States has the same economy as Honduras.

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