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$5 trillion tax cut - $2.3 million offsets = $2.7 trillion math problem
Mitt Romney on Tuesday night:
I know what it takes to balance budgets.  I’ve done it my entire life.  So for instance, when he says, yours is a $5 trillion cut -- well, no, it’s not, because I’m offsetting some of the reductions, withholding down some of the deductions and [crosstalk] I just described to you, Mr. President, I just described to you precisely how I’d do it which is with a single number that people can put -- and they can put their deductions and credits into that bucket.
Huzzah! With those words, Mitt Romney finally took ownership of a specific mechanism to pay for his tax cut plan, the cost of which is $5 trillion over 10 years and includes both a $1 trillion corporate income tax cut and a 20 percent across-the-board tax cut which would cost $4 trillion.

Up until Tuesday's debate, Romney had refused to explicitly endorse a mechanism for offsetting the cost of that tax cut, steadfastly avoiding putting his name next to anything that could be evaluated by independent economic analysts. But now that's changed: Romney is now explicitly in favor of leaving deductions in place, but placing a limit on the total amount of deductions that any one taxpayer can take. The thing that he hasn't said is what that limit would be, but based on his comments in the past and during the debate, it would be either $17,000, $25,000 or $50,000. That's a pretty big range, but it's nonetheless specific enough for economists to analyze, and yesterday the non-partisan Tax Policy Center ran the numbers. Here's what they found:

The Tax Policy Center did the math yesterday. Capping deductions at $25,000 would raise $1.3 trillion in tax revenue over 10 years, $3.7 trillion short of what Mr. Romney needs to pay for his tax cut promises.  Capping deductions at $17,000 – a level the Romney campaign floated a few weeks ago – would raise $1.7 trillion, a shortfall of $3.3 trillion. Even if Mr. Romney eliminated all itemized deductions, his plan would raise only $2 trillion, a deficit of $3 trillion.
That writeup leaves off a couple of important numbers. First, TPC also looked at a $50,000 cap and found it would generate just $760 billion. Second, their prior analysis of Romney's tax plan assumes he will be able to offset the entire cost of his corporate income tax cut, knocking $1 trillion off the shortfalls listed above. With those two numbers in mind, here's the size of Mitt Romney's math problem under the three scenarios he's outlined:
  • $17,000 cap: $2.3 trillion math problem
  • $25,000 cap: $2.7 trillion math problem
  • $50,000 cap: $3.2 trillion math problem

Remember, Romney says his plan would be revenue neutral so as to avoid adding to the deficit, but as these numbers show, it wouldn't be revenue neutral no matter what the size of his deduction cap. Instead, his tax cut proposal would add between $2.3 trillion and $3.2 trillion to the deficit.

And don't forget, because Romney reduces rates by 20 percent for everybody—including the top one percent—the wealthiest taxpayers will be getting the biggest tax break. And we'll all end up paying for it with higher budget deficits.

There are only two conceivable ways for Romney to avoid higher deficits without abandoning his pledge to not raise taxes on the middle class. The first would be a dramatic reduction in federal spending, but he's already proposing to add another $2 trillion in defense spending, so that's not a plausible scenario.

The other way to avoid deficits would be for his tax cut plan to unleash so much economic growth that they end up paying for themselves. But that's what Republicans always say, and it never works out. It would be like giving the Bush economic plan another try, except instead of starting with the Clinton tax rates as the baseline, we'd be using the Bush tax rates as a baseline—so we'd end up with an even bigger disaster than we experienced the first time around.

And with Tuesday night's debate and yesterday's Tax Policy Center analysis, the big news is now that Mitt Romney has taken ownership of that plan—for now, at least.

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Originally posted to The Jed Report on Thu Oct 18, 2012 at 09:43 AM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  Balanced budgets his entire life? Bullshit (30+ / 0-)

    You know what Bain does? They unbalance a company's spreadsheet by running up so much debt that it goes bankrupt. On purpose. So Bain can profit on the bankruptcy. Mitt has plenty of experience with that.


    i just baptized andrew breitbart into the church of islam, planned parenthood, the girl scouts and three teachers unions. - @blainecapatch

    by bobinson on Thu Oct 18, 2012 at 09:52:22 AM PDT

  •  What if he sets the STANDARD deduction at $0? (13+ / 0-)

    Everyone must itemize every penny to get a deduction. Bye-bye 1040EZ, bye-bye 1040A.

    And if that's not enough, stop doubling personal exemptions for aged and blind - they're just victims who won't take responsibility, no?

    Am I right, or am I right? - The Singing Detective

    by Clem Yeobright on Thu Oct 18, 2012 at 09:53:28 AM PDT

    •  Poor and middle class (7+ / 0-)

      would really be fucked; most of us don't have enough deductions to itemize so we use the standard deduction.

      "If we ever needed to vote we sure do need to vote now" -- Rev. William Barber, NAACP

      by Cali Scribe on Thu Oct 18, 2012 at 10:39:35 AM PDT

      [ Parent ]

      •  But the middle class won't have to pay taxes (3+ / 0-)

        on interest, dividends or capital gains.

        "Your rate comes down, and the burden also comes down on you for one more reason, and that is every middle-income taxpayer no longer will pay any tax on interest, dividends or capital gains. No tax on your savings. That makes life a lot easier."
        You mean that $4.80 that my savings account paid for the ENTIRE year -- you mean I won't have to pay taxes on that?  Golly, gee, Governor Romney, what a generous plan you have come up with!  

        The central message of Buddhism is not "Every man for himself." -- Wanda

        by the autonomist on Thu Oct 18, 2012 at 11:30:12 AM PDT

        [ Parent ]

      •  Next GOPer to cut the deficit will be the first (0+ / 0-)

        This entire discussion misses the forest among the trees.

        His plan isn't revenue neutral.  It was never designed to be revenue neutral.  If it were revenue neutral then it wouldn't serve any purpose.  

        Instead, its a Bush like tax cut for everyone that will blow a huge fucking hole in the budget and increase the deficit.  However, the GOPers and their propaganda wing only give a shit about the deficiet when a Dem is in the WhiteHouse.

        It will act as a stimulis program, which along with Romney's increase in military spending will, stimulate the economy much more than Obama's previous paltry stimulis.  Trust me, if Romney wins, then his deficit exploding tax cuts will pass, the economy will bloom, and the GOP will look like economic masterminds.

        The Dems concerns about the deficit are the most stupid fucking thing on the planet.  People need jobs, and Romney's budget busting tax cuts will get the economy moving again.  

        Look again at these numbers:

        With those two numbers in mind, here's the size of Mitt Romney's math problem under the three scenarios he's outlined: $17,000 cap: $2.3 trillion math problem
         $25,000 cap: $2.7 trillion math problem
         $50,000 cap: $3.2 trillion math problem

        Remember, Romney says his plan would be revenue neutral so as to avoid adding to the deficit, but as these numbers show, it wouldn't be revenue neutral no matter what the size of his deduction cap. Instead, his tax cut proposal would add between $2.3 trillion and $3.2 trillion to the deficit.

        If only the Dems were willing to do something to get people to work that would increase the deficit by $2.3 and $3.2 trillion dollars.  In comparison, Obama's stimulis cost less than $1 billion.    

           

        •  "revenue neutral" means NO STIMULUS (1+ / 0-)
          Recommended by:
          Calamity Jean

          Trees, meet Forest.

          i can't F-L-I-P-P-I-N stand to listen to biden and obama (and everyone here) try to argue about the impossibility of covering the tax plan. Sure, ok to point that out. But just cut to the chase and point out the bogus nature of this whole damn Tax-Cut-For-Free sham.

          Their justification for tax cuts is economic stimulus. The problem is deficit explosion. Their solution is other tax code offsets. Romney keeps repeating: "Revenue Neutral!"  But this NEGATES the whole tax cut motive in the first place. Without a net increase in private sector moneys, there IS NO STIMULUS.

          It's three card monte. Arguing about the possibility of covering a 20%/ 4T tax cut by mythical deduction/loophole offsets is the argument R$R WANT to have. STOP helping them.

          The R$R proposal just shifts the tax burden from one group to another. It amounts to rearranging the chairs on the deck of the Titanic. Different people are supported, but it doesn't float the boat.  MAKE THAT CLEAR! Make it clear that Deficit explosion is a matter of National Security, Military Security, Economic Strength in the global market for U.S. business. The R plan makes us Weaker. The D-plan makes us stronger, and already is.

          •  Mainly Disagree (1+ / 0-)
            Recommended by:
            Calamity Jean

            Of course a "revenue neutral" tax change has no stimulis effect, same as my giving you two $5 bills for a $10, another revenue neutral transaction, has no stimulis effect.  

            Romney's proposal, if it were actually supposed to be "revenue neutral" would do nothing for the economy.

            However, it is isn't going to be revenue neutral.  It will greatly increase the deficiet.  Where we disagree is your belief that a so-called "deficit explosion" will cause us harm.  Actually, Keynes shows us that the only way out of our current depression is to have the government borrow money and use the money to stimulate the economy.

            Then, when the economy is up and running again, the government should increase taxes to pay back the money borrowed.

            Being concerned about the deficit today is like being worried that a starving person in danger of dying might become overweight if fed.  Its really counter productive, and the exact WRONG thing to be worrying about now.    

            Thus, Romney, like Bush the Lessor, and even Ronald Reagan, plans to stimulate the economy via tax cuts and increased government spending on the military, which will cause the deficit to increase.  While I strongly believe that government spending would be put to better use if it didn't go to the military, and direct government spending is much more stimulative than tax cuts, Ronmey's economic policy will in fact stimulate the economy, which is exactly the right thing to do today.

                     

            •  strange way to mainly disagree (0+ / 0-)

              Keynes is fine. But Keynes didn't propose LESS government revenue, he proposed more government spending as stimulus. And, it worked in the aftermath of the Depression. So, we seem to partially agree there. But Reagan's example is not a convincing example for your conclusion. The Reagan tax code changes wrought a major recession (the "Reagan Recession"), which his administration nearly failed to survive, and which created a massive deficit (essentially a year-on-year tax to service the interest) for which Bush the Elder payed the price when he tried to do the right thing by raising taxes, against his "read my lips" pledge.

              What saved Reagan was Fed chair Paul Volker (appointed by Carter), who invoked his tight money supply method. This got the incredibly high interest rates down (but caused a major increase in unemployment), and spurred business investment and growth (just in the nick of time for Reagan's re-election). But we already have tight money at the Fed, and historically low interest rates. So, that mechanism isn't available this time. Indeed, if it were, the Obama economy would have been fine and we wouldn't be having this discussion.

              Bush The Younger's tax cuts did what....??! The weakest private sector job growth in decades, even before the housing bubble collapse. The fact they weren't paid for, on top of a massive increase in size of government (Homeland Security bureau) and military adventurism, now leaves us with a serious level of debt. Not insurmountable, but not at the low level BushII inherited. It matters a lot what taxes you cut. Rich people invest their money in growth economies, more like China and not the U.S. (see e.g., the skirmish on whether Romney or Obama have more of their pensions in China). They take money OUT of the U.S. economy, on balance. Indeed, I would too if i were rich.

              Corporate america has huge reserves of liquid assets, and money for borrowing is essentially free (0.25% interest is practically a giveaway). The current problem in stimulating business growth (hence jobs) is demand, not supply. Tax cuts for corporations (US$ 1 T under R$R plan) do not help goose investment in current low interest circumstances. (But, i would certainly favor restoring some sanity to the corporate tax structure, where it's nominally 35% but typically in the low 20's through market-twisting deductions and incentive mechanisms, as means of promoting U.S. competitivness in global market. Obama explicitly favors this as well.)

              Tax cuts to the middle class would instead focus the cost to the debt on promoting market DEMAND, and the D-plan specifically maximizes THIS component.  The alternative mech is increased gov't spending, and NON-military spending in particular. This is what worked particularly well under Clinton, who scaled back military spending markedly and re-directed to infrastructure (including education and research; e.g. NIH budget was doubled in 5 years under Clinton). This is what is needed now. However, under the current political climate, Dem's intent to increase gov't spending (Keynesian way out) is very very muted.

              I actually suspect Romney understands all this, but is essentially locked into a doomed strategic approach by the need to satisfy his stakeholders - rich donors, and less affluent whites fearful of demographic change.

              •  addendum (0+ / 0-)

                We're leaving a ton out, natch. Inflation was massive under Carter, and Volker's initial strategy was to control that. One of the fear-mongering points against a Keynesian approach in the present situation is Inflation, which would cool business investment and pull the rug out from under fixed income retirees, among other things. However, inflation doesn't increase when there's no demand, which is Bernanke's justification for continuing his quantitative easing programs (printing money).

              •  Here's Where I Disagree (0+ / 0-)

                You stated:

                Make it clear that Deficit explosion is a matter of National Security, Military Security, Economic Strength in the global market for U.S. business. The R plan makes us Weaker. The D-plan makes us stronger, and already is.
                To me, complaining of a "deficit explosion" in the middle of  a depression is the exact opposite of Keynes.  We need a deficit explosion if we want to get out of this depression.  

                Tax-cuts and increased spending by the federal government are both stimulative.  I'm sure you know something of the "multiplier effect" where spending a dollar causes more than a dollar's increase in the economy.

                In congressional testimony given in July 2008, Mark Zandi, chief economist for Moody's Economy.com, provided estimates of the one-year multiplier effect for several fiscal policy options. The multipliers showed that any form of increased government spending would have more of a multiplier effect than any form of tax cuts. The most effective policy, a temporary increase in food stamps, had an estimated multiplier of 1.73. The lowest multiplier for a spending increase was general aid to state governments, 1.36. Among tax cuts, multipliers ranged from 1.29 for a payroll tax holiday down to 0.27 for accelerated depreciation. Making the Bush tax cuts permanent had the second-lowest multiplier, 0.29. Refundable lump-sum tax rebates, the policy used in the Economic Stimulus Act of 2008, had the second-largest multiplier for a tax cut, 1.26.[5]Wiki
                While I agree that tax cuts are less stimilative than spending, I don't agree that tax cuts have zero stimulative effect.  Simply put, they have some, with the amount of stimulate effect depending on the type of tax cut and the income level of those receiving the cut.    

                Concerning Reagan's tax cuts, they were stimulative, as is most every tax cut.  Sure, Volker raised interest rates to crush inflation, but that merely means fiscal policy was stimulative, but monitary policy was contractive.  Monitary policy won.

                Concerning Bush the Lessor, his tax cuts and deficit spending were stimulative.  I believe they helped the economy overheat, and led to our current collapse.  If Bush the Lessor didn't let the economy overheat, we wouldn't be where we are today.                  

    •  Also sets cap gains tax at zero (6+ / 0-)

      And, IIRC, ends the estate tax, both of which would greatly benefit him and his family and further explode the deficit.

      The scientific uncertainty doesn't mean that climate change isn't actually happening.

      by Mimikatz on Thu Oct 18, 2012 at 10:40:21 AM PDT

      [ Parent ]

      •  Good point. (1+ / 0-)
        Recommended by:
        JeffW
        Also sets cap gains tax at zero
        And, IIRC, ends the estate tax, both of which would greatly benefit him and his family and further explode the deficit.
        The United States needs a very strongly progressive estate tax to prevent the development of a hereditary titleless aristocracy.  

        Off topic: great sigline.  

        The scientific uncertainty doesn't mean that climate change isn't actually happening.

        Renewable energy brings national global security.     

        by Calamity Jean on Fri Oct 19, 2012 at 02:37:12 AM PDT

        [ Parent ]

    •  i was thinking that (2+ / 0-)
      Recommended by:
      mtnlvr1946, Calamity Jean

      i guess the only way to even come close to making his tax cut revenue neutral is to eliminate all deductions. that's it, your taxable income is your gross income.

      then again, he is promising to 'simplify the tax code'. can't get simpler than that. no forms to fill out! just write a check and attach your W-2.

      anyone born after the McDLT has no business stomping around acting punk rock

      by chopper on Thu Oct 18, 2012 at 11:22:13 AM PDT

      [ Parent ]

  •  Sketchy Deal Math (10+ / 0-)

    yksitoista ulotteinen presidentin shakki. / tappaa kaikki natsit "Nous sommes un groupuscule" (-9.50; -7.03) 政治委员, 政委‽ Warning - some snark above ‽

    by annieli on Thu Oct 18, 2012 at 10:00:42 AM PDT

  •  this new 'bucket' plan is the worst yet (8+ / 0-)

    Even setting aside the impossibility of the mathematics, this plan is just completely idiotic.

    Say you didn't require a 20% tax rate cut, and were willing to settle for whatever rate cut made the numbers balance.  That is, assume his plan is much, much better than what he is proposing.

    Even in that case, tax rates are lowered, but we all end paying the same, plus we still have the same complexity in the tax code!  That was his whole justification for doing it!  To simplify the tax code.  Now, not only would you need all the same mechanisms for recognizing and taking deductions, you would have to keep track of the total amounts to fill a bucket.  It's ludicrous.

    I think it's not a bad idea to cut rates and eliminate exemptions  in order to simplify the tax code.  If nothing else, it would make predicting tax liabilities easier, enforcement of law easier, and ease preparation for taxpayers.  It just can't be done the way he is proposing without hitting the middle class.

    The way to do it would be to eliminate ALL deductions, lower tax rates for incomes less than 250k, or maybe 500k, so that the amount they are paying now stays the same, declare capital gains as income, and then raise the income tax rate on incomes over 250k, in a progressive fashion to AS MUCH AS THEY NEED TO BE for the plan to remain revenue neutral.

    That means that the top 1% will not have the carried interest loophole or the capital gains loophole, and may well be paying a 75% tax rate.

    It also means that middle income families may well have a rate around 5%, as they are currently getting huge deductions on mtg interest and child credits that would be gone, requiring a much lower rate to ensure the same effective rate.

    •  Interesting he wants to cap deductions about where (2+ / 0-)
      Recommended by:
      D in Northern Virginia, mmacdDE

      the median income is, $50,000.

      And his tax savings all come from capital gains and foreign tax paid, so he doesn't care.  He lives in a no-income tax state. Probably owns his many homes outright, and so what if he loses the charitable deduction to the extent he tithes over $ 50,000.  Makes it all up in the zero cap gains provision.

      The scientific uncertainty doesn't mean that climate change isn't actually happening.

      by Mimikatz on Thu Oct 18, 2012 at 10:44:46 AM PDT

      [ Parent ]

    •  This could work (1+ / 0-)
      Recommended by:
      Calamity Jean

      Make the standard deduction 15k for an individual, and 5k more for each child up to 4 children.

      So a family of 4 gets 40k as a standard deduction.

      No itemizing.

      A family of 4 can make 40k with NO federal income tax. They still might need to itemize for state/local taxes (unless they overhaul as well), but for federal, they won't need to do anything but add up the numbers, subtract 40k, and see if there's anything left to tax.

      Tax rates could be adjusted as well. 15% on up to 500k (remember, that's AFTER the standard deduction), 20% on 500k+$1-1mil, 40% on 1mil+$1 and more.

      All income taxed at the same rate.

      So if a couple makes 1 mil they get to deduct 30k right off the top. They pay 15% on the first 500k (75k), 20% on the next 500k (100k) which adds up to 175k on 1 mil. That's not horrible. The top rate anybody pays is 40%, but they pay it on ALL income, from any source.

      And I'd make any state/local govt run lottery winnings tax free.

      That's really what drives people's opposition to higher tax rates on big money. They all think they're going to win the lottery some day and they don't think they should have to pay taxes if they do.  

      •  it's a good idea (0+ / 0-)

        I'm not sure those rates would make up for the lost revenue, but it's definitely in the right direction.

        I just filed my taxes the other day, after getting an extension, and it's just a horribly complicated process with too many dark avenues to research to try to get the best rate.

        Of course, the people in power want it that way, they want to keep some of those avenues secret, so they can take advantage, and the rest of us will keep paying.

        I think a message that combines the (generally) conservative 'simplify the tax code' along with the (generally) liberal 'make the rich pay their fair share' is a winning combination.

        It also hits the (generally) libertarian 'tax subsidies distort markets'.

        I'm usually pretty skeptical of that argument.  I think the Government should have a role in steering markets.  That should be one of their primary duties, to create, protect, and steer markets.

        However, I think it's time we took a look at all these exemptions and credits as a whole, wipe the slate, put in a simple graduated income tax, perhaps with your individual standard deduction, and make it progressive enough so that capital does not simply float to the top and become unproductive, as is currently the case.  Money you earn is income, full-stop.

        There are a couple exemptions I would consider keeping in, like property tax deduction, (but not mortgage interest), as that is a large tax bill people are already paying to the states, so they are contributing to public funding already with it.  Likewise I would consider keeping in an exemption for state income taxes, for the same reason.

      •  That's a sneaky-good idea. (1+ / 0-)
        Recommended by:
        JeffW
        And I'd make any state/local govt run lottery winnings tax free.

        That's really what drives people's opposition to higher tax rates on big money. They all think they're going to win the lottery some day and they don't think they should have to pay taxes if they do.  

        It would also allow state & local governments to reduce their payouts and thereby let lotteries raise more money.  

        Renewable energy brings national global security.     

        by Calamity Jean on Fri Oct 19, 2012 at 02:58:55 AM PDT

        [ Parent ]

  •  Romney says his plan would be revenue neutral (12+ / 0-)

    If the plan IS revenue neutral, then WHY DO IT???

    •  well (6+ / 0-)

      he used to say, do it to simplify the tax code, but now with the bucket plan, all it does it add yet another layer on top, since all those exemptions still exist, but you have to pick and choose which ones to apply and keep track of some running total.

      So now it really has absolutely no point.

    •  It's basically another iteration of the flat tax (4+ / 0-)
      Recommended by:
      CwV, JML9999, cocinero, Calamity Jean

      (or at least a baby step in that direction) and since Steve Forbes isn't running this time around Mitt probably saw an opening to ingratiate himself with that particular set of nutcases . . .

    •  Thank you!! (7+ / 0-)

      That has been my question all along, and one I wish the President would toss out to the public at the next debate.

      "Simply, the math doesn't add up.  There aren't enough deductions to pay for the 20% cut Governor Romney proposes.  Now, if he changes his proposal to be a 10% cut, and actually offers specific deductions for a change, and the math can somehow add up...what would be the point?  If it's revenue neutral, doesn't cost a dime but doesn't raise a dime either, then how would this pay down the deficit?  If it has ZERO impact for families and individual taxpayers, and ZERO impact on the deficit, it seems pretty pointless."

      •  AMEN (4+ / 0-)
        Recommended by:
        SoberGuy, cocinero, Matt Z, Calamity Jean

        you said it much better than me.  I mean, seriously.  What the hell would be the point??

        •  He's selling some shiny shit (5+ / 0-)
          Recommended by:
          johnva, TimmyB, cocinero, Matt Z, Calamity Jean

          It's been polished up.  It's nice and shiny and has that very cool, modern catch-phrase to it.

          But at the end of the day it's a pile of shit.  No matter how you dress it up, no matter what you call it, it's shit.

          And that's how we have to look at it.  He's a salesman trying to sell something.  He's looking for his own personal benefit (by which I mean the White House, not dropping capital gains rates, which of course benefits him as well).  Every salesman has an angle and motivation.  We can't be distracted by the "cool" factor (Dyson vacuums, I'm looking at you).  We can find much better "products" that usually are far more effective and cost us a whole lot less.  He's a salesman with a marketing scheme.

    •  Because it benefits him (4+ / 0-)
      Recommended by:
      johnva, mmacdDE, Matt Z, Calamity Jean

      Obviously it rejiggers who pays what at the top end.  He benefits with a zero cap gains rate and carried interest at 15% and probably has few Schedule A deductions (see comment above) and his other benefits come from tax credits, which he doesn't cut unless he considers the credit for foreign tax paid (on overseas accounts and businesses) to be a loophole.  Usually he talks about deductions.

      The scientific uncertainty doesn't mean that climate change isn't actually happening.

      by Mimikatz on Thu Oct 18, 2012 at 10:49:27 AM PDT

      [ Parent ]

    •  Because (2+ / 0-)
      Recommended by:
      cocinero, Calamity Jean

      it dramatically reduces the taxation of S corporation and LLC income, since such income would receive the benefit of reduced rates but would not be subject to the deduction cap.

      "Well, I'm sure I'd feel much worse if I weren't under such heavy sedation..."--David St. Hubbins

      by Old Left Good Left on Thu Oct 18, 2012 at 10:53:15 AM PDT

      [ Parent ]

    •  And why would a plan to fix the deficit be (4+ / 0-)
      Recommended by:
      TimmyB, cocinero, Matt Z, Calamity Jean

      deficit neutral? How COULD it be? Isn't that a bit of a disconnect?
      As Colbert said:
      "RED-TIE STEPHEN: Ah, but he's also promising to close their tax loopholes, so they'll still pay the same amount.
      BLUE-TIE STEPHEN: Then... why cut their taxes?"

    •  Because he thinks that... (4+ / 0-)
      Recommended by:
      mmacdDE, cocinero, Matt Z, Calamity Jean

      corporations and the rich should pay much, much less, and the middle class and poor should pay much, much more. That's what it boils down to, even if his math did add up so that it's revenue neutral (and it doesn't remotely do so).

      Romney wants to shift the burden of paying for government away from the rich, corporations, and the professional investor class and onto people who work for a living and are taxed on their wages. He and his running mate have even said so: they think that working people are parasites who are sucking the country dry and don't have "skin in the game" and he thinks it's perfectly fair that he pays such a low tax rate. And he thinks that things should be tilted even more in that direction, so that he pays less or even zero, while the "parasites" pay more. He thinks that's reasonable because he believes that the rich are supermen who carry the rest of society on their backs even without paying any taxes.

      This is what Romney and Ryan really believe. They just are too cowardly to actually state it baldly and stand up for their true beliefs, because they know that people would hate their ideas if they understood what they were selling.

    •  It would shift part of the tax burden away (1+ / 0-)
      Recommended by:
      JeffW
      If the plan IS revenue neutral, then WHY DO IT???      
      from Romney and his pals, and get the funds from lower-income people who actually work for a living.  That's what "broadening the tax base" means.  

      Renewable energy brings national global security.     

      by Calamity Jean on Fri Oct 19, 2012 at 03:03:34 AM PDT

      [ Parent ]

  •  he also wanted to get rid of the tax on investment (11+ / 0-)

    And a lot of the 1% are just like him - almost all of their money comes from interest on their investments.  So, a lot of the richest people in the country would end up paying no income tax at all, or close to it, because their income is from investments.

    When you factor that in, there's truly no way he could get even close to the plan he's talking about.  It's all hogwash, and he's cynically (but unfortunately probably correctly) thinking conservative voters are fucking-stupid enough to believe it anyway.  They'll "take it on faith," the way they do so much else.

    It amazes me that this blatant con-man is even being considered, by anyone, as being worthy of the office of president.  I thought Dubya was as bad as things could get, but it's looking like Dubya was almost semi-competent when compared to the stupidity Mitt is planning to unleash.

    "Glenn Beck ends up looking like a fat, stupid child. His face should be wearing a chef's hat on the side of a box of eclairs. " - Doug Stanhope

    by Front Toward Enemy on Thu Oct 18, 2012 at 10:26:22 AM PDT

  •  Just got off the phone with polling company (7+ / 0-)

    Asked a lot of questions about the economy and taxes and who would do better BO or MR. I live in Florida and they also asked some Florida specific questions on medicare. We are a cell phone only household, and they asked if we had a landline. Of course I towed the party line on Barack Obama. The questions weren't slanted, very straight forward.

    Interteresting. The first time I've been polled!

  •  short answer - R-Money is full of crap (6+ / 0-)

    To make it simple, the numbers don't add up.

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Thu Oct 18, 2012 at 10:28:13 AM PDT

  •  Deductions in a bukkit? (6+ / 0-)

    NOW SHOWING
    Progressive Candidate Obama (now - Nov 6, 2012)
    Bipartisan Obama returns (Nov 7, 2012)

    by The Dead Man on Thu Oct 18, 2012 at 10:28:47 AM PDT

  •  Leaving it up to Boner and McTurtle to fill in (0+ / 0-)

    the blanks.

  •  Math isn't needed when you have magic 'thinking'. (3+ / 0-)

    And we get a bonus given there's also 'magic underwear' in the mix.

    And remember, you can't spell Romney, without money.

    -6.38, -6.21: Lamented and assured to the lights and towns below, Faster than the speed of sound, Faster than we thought we'd go, Beneath the sound of hope...

    by Vayle on Thu Oct 18, 2012 at 10:32:25 AM PDT

  •  "Pick a number" Steppp right up! (3+ / 0-)

    It's Romney tax plan Roulette.  Yes I've changed my plan a bunch of times already, but trust me - I won't change it back again when it's between the middle class and my feudal lord buddies.

    I hate hate. I love the look in peoples eyes when they realize, for the first time, that they have power.

    by 4democracy on Thu Oct 18, 2012 at 10:32:34 AM PDT

  •  Big Dog Ohio (1+ / 0-)
    Recommended by:
    tardis10

    Here is Big dog and some other guy today

    http://www.c-span.org/...

    "Moses stood up about 6'10, sez You can't close the door when the wall's caved in.  "

  •  He's trying to stem bleed on "Of course the math (2+ / 0-)

    adds up" followed by overwhelming silence on exactly how they add up.

    Consistent with his moving to the center this proposal does hurt the middle class disproportionately less than high earners.  Do I trust this claim?  Are you fucking kidding me?  It's another example of him saying whatever will get him elected.  

    What I do know is he thinks it's OK for rich people to live by a different set of rules than everyone else.  He also feels he's especially entitled, based solely on his debate behavior. He assume he's entitled to different treatment  than anyone else, including Obama, b/c he's Mitt Rmoney.

    The only thing we have to fear is fear itself - FDR. Obama Nation. -6.13 -6.15

    by ecostar on Thu Oct 18, 2012 at 10:33:19 AM PDT

  •  Willard's gone from Etch-A-Sketch to Chalkboard? (1+ / 0-)
    Recommended by:
    D in Northern Virginia

    How very Father Knows Best of him. Maybe it's 1950's math.

    Listening to CSPAN this morning and an old man and his wife phoned in and were adamantly and angrily pro-Romney because "I don't want my wife to have to wear a Burqa."

    The brainwashing is complete.

    Perhaps one day the Fourth Estate will take their jobs seriously. Or not.

    by Anthony Page aka SecondComing on Thu Oct 18, 2012 at 10:33:38 AM PDT

  •  And to hear him say it (0+ / 0-)

    If you give everyone a 20% tax cut, the top will still be paying 60% of the taxes woe unto the rich it's so haaard!

  •  I LOVE how he came up with his "data" (3+ / 0-)

    During the debate he repeated something I heard him say before, where he says (I paraphrase):

    "You make everybody's deduction the same, sayyy $20,000, and blah blah blah...."

    On Tuesday, several conservative pundits were running with the 20k figure as if it was something an economist had come up with after days of crunching numbers and analyzing data to form a tax policy.  

    Nope, it was just a hypothetical number Mitt pulled from his proverbial ass.  And THAT is as close as Mitt gets to specifics.....

    Aldus Shrugged : The Antidote to Ayn Rand. ***Buy ALDUS SHRUGGED on amazon, and ALL royalties will be donated directly to Democrats in contentious Downballot races. @floydbluealdus1

    by Floyd Blue on Thu Oct 18, 2012 at 10:34:52 AM PDT

  •  Mitt took mah bukkit (2+ / 0-)
    Recommended by:
    Dr Squid, JML9999


    full o deductions!

    "Kossacks are held to a higher standard. Like Hebrew National hot dogs." - blueaardvark

    by louisev on Thu Oct 18, 2012 at 10:35:04 AM PDT

  •  Bill Clinton. in Parma, OHio (2+ / 0-)

    basically gave the same arithmetic score board.  He was, again, doing a kick-ass job job of explaining things that our electorate never hears from the MSM.

    Sincerely hope there was a kossack there who will post a diary about this event.  Replete with the Bruce Springstein concert!

  •  "Revenue neutral". (5+ / 0-)

    If it were truly revenue neutral, wouldn't that be on a par with rearranging the deck chairs on the Titanic?

    I am become Man, the destroyer of worlds

    by tle on Thu Oct 18, 2012 at 10:36:14 AM PDT

  •  Hi Jed (3+ / 0-)

    don't forget on your calculations those pesky increases on Defense spending. That is another cool pair of trillions. So this guy is force feeding the country a whole load of "El Toro PuPu"

  •  Dear mitt (1+ / 0-)
    Recommended by:
    Calamity Jean

    Grabbing all the money and stuffing it in your own pocket
    is not "balancing the budget". That's not the way it works .
    That may have been the way you balanced your own ,
    but that's just not going to work .
    Sorry , but please do get back to us with some new / real plan asap .

    "Drop the name-calling." Meteor Blades 2/4/11

    by indycam on Thu Oct 18, 2012 at 10:37:22 AM PDT

  •  If his plan was actually revenue neutral, then why (0+ / 0-)

    bother to lower the rates?  I assume that if it's revenue neutral to the government, it would be tax neutral to taxpayers.  If we are taxed at a lower rate, but then lose deductions, we're no better off than before the tax cut.  Capping deductions might take care of that, but then the math overall doesn't work anyway.

    The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt. Bertrand Russell

    by accumbens on Thu Oct 18, 2012 at 10:37:26 AM PDT

  •  i think what was most interesting when he (3+ / 0-)

    made his statement about his tax plan at tuesday's debate (when he said alll the stuff about eliminating capital gains tax yadda yadda) was the way he presented it to the middle-class audience.

    he presented it as an appeal to their greed.  and as if he was going to let them into the club.

    not an appeal towards balance, towards a level playing field.  

    that was his emotional hook, or so he seemed to believe.

    his body language, his facial expression, everything about him was not about reasoned  policy, but almost something lascivious and certainly grasping.  

    i don't know how to prove this to anyone, but it was there and it was startling to me.

    and of course, just to put the evil twist on it, that was him sneaking in more tax cuts for the rich.

    “And, for an instant, she stared directly into those soft blue eyes and knew, with an instinctive mammalian certainty, that the exceedingly rich were no longer even remotely human.” ― William Gibson, Count Zero (-9.75 / -9.05)

    by doesnotworkorplaywellwithothers on Thu Oct 18, 2012 at 10:38:01 AM PDT

  •  I was scratching my head the other night watching (2+ / 0-)

    the debate because what Romney was telling was:

    1. The rich would not get any more money because he'd make sure that the tax cut they received would be offset by decreases in their deductions.    I know this to be a lie since I've read analysis that has said that there aren't enough loopholes (deductions) to close to make up for this 20% reduction in taxes.    Regardless, let's assume I didn't know this and take him at his word - the rich won't get any tax break from this and end up paying the same.

    2. The middle class will get the 20% tax break and also won't lose any deductions.    This sounds great, but as the middle class provide the most revenue to the government, how is this going to be revenue neutral?   Who is going to pay for this?

    3.  The poor are not mentioned.   Since the rich are providing the same revenue and the middle class are providing less, I must assume that to make his plan revenue neutral that Romney must think he can make up the revenue by getting more money from the poor.

    I really wish the President would have said, "Mitt, how is your plan revenue neutral if the rich are paying the same and the middle class are paying less?"

  •  Don't forget the other $2 trillion (1+ / 0-)
    Recommended by:
    tardis10

    The math can't be separated from Romney's other pledge, to increase Pentagon spending by $2 trillion over the same ten-year period -- even without any additional wars, just basic day-to-day spending. (This is using CNN calculations, hardly a left-wing rant.) So his proposals are even more out of balance than just the tax issue shows.

    Unless, of course, he's going to take the Bush route and put all that "off-budget" before doing the adding-and-subtracting thing to declare a budget "balanced."

  •  Will we be able to put all our vouchers... (0+ / 0-)

    In our individual buckets?

    And what if Jack and Jill borrow my bucket to fetch a pail of water or something? Am I liable if Jack falls down...?

    The Republican brand: "Consequences, schmonsequences, as long as I'm rich"

    by D in Northern Virginia on Thu Oct 18, 2012 at 10:39:04 AM PDT

  •  Mitt: Math is SO overrated (0+ / 0-)
  •  Making shit up. That is the Romney plan. (2+ / 0-)
    Recommended by:
    CwV, Calamity Jean

    When Romney described his plan, saying let's pick $25,000, Obama should have responded by pointing out if Romney actually had a plan he would have to explain it with "pick a number".

    In the debate Romney also asserted that he "had run the numbers."  Obama should have called BS there as well by pointing out IF that was true why won't he share them with America?

    The fact that Republican's can continue to lie with impunity, and have been doing so over 30 years, proves just how poorly the US media does informing the public. The fact that it is even news that Candy Crowley pointed out the TRUTH makes such news should confirm just how bad our media sucks.

  •  I have a good deal for you. (1+ / 0-)
    Recommended by:
    Calamity Jean

    My plan is for you to give me $10,000. Why should you?  Because you'll get it back.  It's not a loan or a gift.  It's actually a non-event.  You see, when you get your money back, and I'm confident you will, trust me, that's my "plan," it will be as if you had never given it to me in the first place, retroactively speaking.  Surely you can see that it is "deficit neutral" from that point of view.  

    Now, there's no need to consider that I get your $10,000 without risk.  That's because there is no risk.  Risk is not in my plan.  So let's move on . . .

    A right answer to the wrong question is a wrong answer.

    by legalarray on Thu Oct 18, 2012 at 10:47:39 AM PDT

  •  Romney doesn't have to do the math. He's got (1+ / 0-)
    Recommended by:
    Calamity Jean

    people for that. Now back to work before he sets the hounds on you!

    "The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

    by Lily O Lady on Thu Oct 18, 2012 at 10:48:09 AM PDT

  •  With MittMath you couldn't graduate high school (1+ / 0-)
    Recommended by:
    Calamity Jean

    At least here in MA.

    "Good morning, brothers Koch. I see you're doing well. If I had me a shotgun, I'd blow you straight to hell." w/apologies to R. Hunter

    by RUKind on Thu Oct 18, 2012 at 10:50:43 AM PDT

  •  Meh (0+ / 0-)

    Do any one of the 2,348 remaining "undecideds" really give a shit at this point that the numbers don't add up?

    R-Money has already gotten away with much bigger untruths, contradictions, and "etch a sketch" moments than this that have had little to no effect on his overall polling.

    Moreover, a lot of the lies he's been caught in are much easier to understand than this one. Tax policy is pretty heady stuff; all those numbers tend to hurt folks' brains.

    All the average Low Info Voter seems to want to know about R-Money is that he was once a Very Important Businessman who made beau coups bucks. So when it comes to all this fancy numbers stuff, he must know what he's talking about, right?

    That's why he can get away with saying, in effect. "Trust me, I know what I'm talking about here."    

    With a little more than two weeks to go before the election, the memes for both candidates are already set. Shit like this ain't going to move the needle. The Prez already has enough people who are inclined to vote for him by now to win re-election. It's all going to be about the ground game from here on out

  •  a few whoppers (1+ / 0-)
    Recommended by:
    Calamity Jean

    Mitt got away with a few huge whoppers during the last debate...

    Tell us more about that oil pipeline from Canada?

    or how about his rambling about "Fast and Furious?" did anyone even call him out for trying to pull an alternate conspiracy theory out when he failed on the Libya part (one that I was most worried about going into the evening).

    Also, I grew up in Mass.  The states are paying for college for every kid that can pass an exam?  Wait, what?

    I mean the Pres. doesn't get off my hook.  Clean coal?  Please.  Nothing about the environment.   And bickering about who would allow for more drilling in where, national parks?  Protected lands??

  •  You people can't think outside the box (0+ / 0-)

    What team Romney hasn't disclosed is that they have a (-)Tax Credit waiting in the wings to be unveiled just before the election.
    We've all been complaining about how the wealthy get specific credits that the poor and middle class can't take advantage of.  No more! With the (-)Tax Credit you simply look up your Adjusted Gross Income in your tax book, find your income bracket, and write down that number.  This is your new tax credit!  The credit starts at $50,000 for the lowest income brackets and gradually drops to 0 once your income gets to $1,000,000 or more.  Why?  Because the wealthy don't need any more tax breaks and their trees are already at just the right height.
    Now before you finish your return, stick a '-' next to the left of your new deduction.  Not only is this your new (-)tax credit, this is how much your (-) credit is reducing the deficit!
    God Bless America!

  •  Wrong...again (1+ / 0-)
    Recommended by:
    Calamity Jean

    Mitt Romney actually hasn't shown any deftness at balancing budgets.  

    Not in the private sector.

    Not in the public sector.  

    He has really only shown to have a great deal of love for radical debt.  

  •  This is a SCAM! Favors the RICH. (1+ / 0-)
    Recommended by:
    Calamity Jean

    We just finished our 2011 taxes (shame on us but a donation to Uncle Sam).

    We would get hit by the cap on deductions - hit hard.

    However - because we have a decent amount of money and some various businesses of sorts, if Romney's plan went into place, we'd shift deductions from our Schedule A - personal deductions, to our schedule E, deducting things from our business instead of personal. Without giving too many details, our tax bill would go up maybe $300 - peanuts.

    In fact, where we place our deductions varies from year to year based on how the business did.

    But if you are using the deductions for mortgages and state/local taxes, and you get capped and don't have money and a savvy accountant, you will get nailed.

  •  Follow the links. (0+ / 0-)

      I did just that and one person on NYT posted a link to Weekly Standard article... in which some "explained" that it will all work IF one buys the whole story, hook, line and sinker.  
        Seriously, I'm not a tax guru, but the 2nd page of WS seems to dismiss everyone who disagrees with AEI predictions - as we just don't appreciate all their "IFS".

  •  Trickle up, down, all the way around ... (1+ / 0-)
    Recommended by:
    Calamity Jean

    Jed says: "The other way to avoid deficits would be for [Romney's] tax cut plan to unleash so much economic growth that [the cuts] end up paying for themselves. But that's what Republicans always say, and it never works out."

    That's the classic supply-side/trickle-down theory that is the refuge the GOP turns to balance whatever tax cuts or other bennies it wants to bestow. (And let's be candid here, folks, Democrats engage in their own kinds of balance-juggling and sketchy thinking, too, just with the more opaque jargon of government accounting and budgeting.)

    "It never works out" must be provable, because just saying it ain't so is just our conclusory argument. So, we need  to prove that tax cuts do not produce balacing-off economic activity. Without graphs, just words, preferably 30 seconds worth (preferably fewer) and not with contrary economic theory but with statements that sound like facts.

    This wont be as easy as it sounds. Give a large segment of American society more money from tax cuts and we tend to spend it. Trickle down pertains to the wealthier of us, those who have more money than they need to spend currently, so they can save and invest. But again, saving and investing are activities to encourage.

    So disproof of trickle down is somewhat of a minefield. We need the right combination of words and figures that proves that tax cuts for the wealthy do not produce commensurate economic activity. It can't come soon enough.

    Obama and strong Democratic majorities in 2012!

    by TRPChicago on Thu Oct 18, 2012 at 11:19:36 AM PDT

  •  Implications of Romney's plan for small businesses (1+ / 0-)
    Recommended by:
    Calamity Jean

    The democrats need to call out the implications to small business of this "simplified" approach to tax reform. Unincorporated small businesses who,when they file through individual tax returns, have significant deductions as well. The Republicans typically confuse the matter when they criticize Obama's plan to let the Bush tax cuts for the wealthy expire, saying that this would "kill" small businesses (it would not). Actually Romney's plan might very well do that. Of course, then they will respond with (oh, but we would not cap ALL deductions). Then they get into the which ones do you cap and which ones do you not debate even deeper. When you game this system this way (lying as you go) you just create that proverbial tangled web of deceit.

  •  Another Thing Not To Forget (1+ / 0-)
    Recommended by:
    Calamity Jean

    The cuts would go disproportionately to the rich, whereas the offsets would fall disproportionately on the middle class.  The deductions Romney is talking about phase out for the super-wealthy.  They don't get the deductions now, so eliminating them would not affect the super-wealth.

    So, tax cuts for the rich, tax increases for the middle class.

    Somebody correct me if I'm wrong, but that's how it looks to me.

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