The Mystical ‘Revenue-Neutral’ Romney Tax Cuts


Paul Ryan appeared on Fox News on Sunday morning with Chris Wallace and was asked about the Romney/Ryan tax plan, which promises to cut everyone’s federal taxes by 20% across the board without decreasing federal revenue and thus increasing the deficit. But when asked how they would do that, darn the luck, he just didn’t have time:

WALLACE: So how much would it cost?

RYAN: It’s revenue neutral…

WALLACE: No no, I’m just talking about cuts. We’ll get to the deductions, but the cut in tax rates.

RYAN: The cut in tax rates is lowering all Americans’ tax rates by 20 percent.

WALLACE: Right, how much does that cost?

RYAN: It’s revenue neutral.
[…]
WALLACE: But I have to point out, you haven’t given me the math.

Ryan: No, but you…well, I don’t have the time. It would take me too long to go through all of the math. But let me say it this way: you can lower tax rates by 20 percent across the board by closing loopholes and still have preferences for the middle class. For things like charitable deductions, for home purchases, for health care. So what we’re saying is, people are going to get lower tax rates.

Okay, so are you going to eliminate or reduce the charitable contribution deduction? Or the mortgage deduction? Or the deduction for the cost of health insurance? If so, by how much? Funny, he doesn’t have time to go through the math, but surely they have time within the campaign to put the math on their website? Of course not. It has nothing to do with time and everything to do with the fact that reducing or eliminating any of those deductions will be opposed by lots of groups they want to vote for them. So instead they’ll just claim that they can make those cuts revenue neutral by magic.

Comments

  1. Johnny Vector says

    Don’t you see, it doesn’t matter how he gains the money back. Maybe he’ll only keep the mortgage deduction for 2nd and higher ordinal homes. Sure, then I’ll be paying more than I am now, but the rate will be lower, and that’s all that matters, right?

  2. warrene says

    This is the kind of thing that makes me look at the debates with interest; I want Obama to back Romney into a corner and make him give a real answer. I can dream.

  3. Mr Ed says

    If it sounds to good to be true…

    PT Barnum school of economics, everyone will pay less but we will still take in as much.

  4. Mr Ed says

    I just figured out the Romney playbook, Catch 22.

    doesn’t Ryan sound a bit like Milo Minderbinder?

  5. scienceavenger says

    Meh, just another example of the liberal media asking gotcha questions. /snark

    Can you just imagine what a horrible precedent this will set if RR win? I can just see the debates in 2016:

    “My plan is awesome, but I don’t have time to go through the details”

    “Oh yeah, well my plan is super DUPER awesome, but I don’t have time either”

    We’ll have the House of Representin’ before you know it.

  6. Chiroptera says

    It would take me too long to go through all of the math.

    Ah, Jesus! He really pulled that one?

    “You probably don’t know enough higher math to understand all of this. We need to use imaginary numbers, like eleventy-two and such.”

  7. busterggi says

    When the Great Ryani says there is nothing up his sleeve you can believe there is nothing up his sleeve.

  8. Scott Hanley says

    This was an astounding performance, even for someone who suspected all along that Ryan was a fraud. It’s such basic accounting: you’re reducing credit by x dollars, and balancing it by reducing debits by the same x dollars. But what’s the magnitude of x? Ryan seems to think he can just claim that $x – $x = $0, therefore $x = $0.

    I’m still not sure whether Ryan himself understands the difference, but it’s clear that no one in the Republican Party has ever questioned him closely enough that he’s had to prepare an answer to this very basic question. That by itself should be scary enough.

  9. dean says

    It would take me too long to go through all of the math.

    Reminds me of the phrase that was used in many locations in my grad school texts on functional analysis and also in asymptotic methods in statistics: “The proof is left for the interested reader.”

    Also: an old Far Side cartoon: a huge blackboard filled with complex looking mathematical symbols on the left, then a drawing of a cloud with the phrase “and then a miracle occurs” inside, and a final bit of math. One white-coat clad man is saying “You may want to fill in a few more steps here”.

    The differences: the comments in the texts forced us to work and learn techniques, the cartoon was funny, Ryan’s bull-shitting is just depressing.

  10. Chiroptera says

    dean, #15: Reminds me of the phrase that was used in many locations in my grad school texts on functional analysis and also in asymptotic methods in statistics: “The proof is left for the interested reader.”

    Heh. I like it when the author says, “It’s obvious that…” and it takes me two days to figure out why what the author said is true.

    It got to the point that everytime I would read that in one of my math texts, I’d write a profanity in the margin.

    People who borrow my books are often amused.

  11. garnetstar says

    Let me translate:

    “Most voters are too stupid to understand the math, and those who do understand it will see that it’s ridiculous.”

  12. dean says

    Chiropera;
    Good point. One of my buddies, when he was taking his prelim in Graph Theory, had to decide whether some statement was true or false: if true, prove it: if false, give counter example. He decided it was true and set about proving. At one point he said:

    “The following Lemma is needed for the completion of this problem. Its proof is trivial, and is left for the interested proctor to complete.”

    You can probably guess how that worked out when the prelim was read. (The assertion was also false: he should have gone the counter example route.)

  13. Uncle Glenny says

    Ryan:

    But let me say it this way: you can lower tax rates by 20 percent across the board by closing loopholes and still have preferences for the middle class. For things like charitable deductions, for home purchases, for health care.

    Just the first of those two sentences alone qualifies as PT Barnum economics. But, it’s strangely consistent, like tax cuts increasing revenue.

    Dean@15:

    I don’t think it was Far Side, but don’t remember the artist, whose work was featured on a number of t-shirts at an MIT gift shop decades ago. I think it did appear in the New Yorker.

  14. Chiroptera says

    dean, #15: Also: an old Far Side cartoon: a huge blackboard filled with complex looking mathematical symbols on the left, then a drawing of a cloud with the phrase “and then a miracle occurs” inside, and a final bit of math. One white-coat clad man is saying “You may want to fill in a few more steps here”.

    If I recall correctly, that was Sidney Harris who was pretty well known among us physics and math geeks for his science/math based cartoons.

  15. says

    Mr Ed:

    Milo was an amoral asshole, but he was at least good at something, like defying the laws of math and economics. Ryan is a Randroid hack who isn’t good at anything.

  16. whheydt says

    Re; Uncle Glenny (@#19).

    Try… S. Harris.

    But I think it was also done in the The Far Side. It’s a pretty common meme.

    Now, my sister once ran into the sort of math issue several people have noted…in a way…

    She took a course on Analog Computers. The prof started the first lecture with, “You remember all the calculus problems from your Engineering courses that you were told were too hard to solve? In this course, we will show you how to solve them.”

    (For those who have never had any Calculus courses, the problem with integral calculus is that you have to know what the answer is to solve the problem. For those who have never had any Engineering courses, the problem is that no one actually knows how to solve the problems other than as an approximation.)

  17. Michael Heath says

    Scott Hanley writes:

    But what’s the magnitude of x? Ryan seems to think he can just claim that $x – $x = $0, therefore $x = $0.

    I’m still not sure whether Ryan himself understands the difference, but it’s clear that no one in the Republican Party has ever questioned him closely enough that he’s had to prepare an answer to this very basic question. That by itself should be scary enough.

    While I think Paul Ryan has become the Bill Dembski of economics, he does know what’s going on when it comes to budgetary parlor tricks, especially because he depends on them in his own two budget proposals where he pulled his economic growth rate projections out of a conservative ‘think tank’s’ ass just like W. Bush did for this tax cut proposals.

    The question to ask them is the following:

    Mr. Romney/Ryan, in 2011 the effective federal tax rate on income was 20.5%; what would the effective tax rate be under the Romney plan?

    That also could expose them to breaking the Norquist pledge.

  18. d.f.manno says

    Ryan didn’t have enough time even though he was appearing on the 24/7 infomercial network for the Republican Party, Fox News? Even his lies about his economic program don’t add up.

  19. bad Jim says

    Fermat originated that dodge back in 1637: “I have discovered a truly marvelous proof of this, which this margin is too narrow to contain.”

  20. eric says

    This is the kind of thing that makes me look at the debates with interest; I want Obama to back Romney into a corner and make him give a real answer. I can dream.

    Romney repeated the Ryan’s line: we will cut everyone’s rate, reduce loopholes, and this will be revenue neutral. Obama (very tepidly, I thought) basically said he had no math to back it up. Romney simply repeated the claim.

    It was a very bad performance by Obama in a couple of ways. First, he seemed surprised that Mitt would even make this claim. His team had 3 days to come up with a response to Ryan’s Sunday claims. Either they didn’t think Mitt would bring it up or they weren’t aware of Ryan’s claim, but either way, the President clearly had not prepared any specific counter-point. Secondly, even with no prepared counter-point, Obama has shown himself to be a pretty good off-the-cuff argumenter in the past. But his back-and-forth on this amounted to little more than just “its revenue neutral! [by Mitt]” “is not!” “is too!” “is not!” There was basically nothing to Obama’s agument other than a simple counter-assertion.

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