Mitt Romney already had a simmering Dooh Nibor problem, reverse Robin Hood, as in give to the rich and take from the rest. Fresh off a series of overseas gaffes team Romney decided to tap his Wile Coyote, super fnancial genius, credentials. They miscalculated, badly, in more ways than one, and the plan they released has now been widely panned:
Ezra Klein – To help Romney, the center did so under the most favorable conditions, which also happen to be wildly unrealistic. The analysts assumed that any cuts to deductions or loopholes would begin with top earners, and that no one earning less than $200,000 would have their deductions reduced until all those earning more than $200,000 had lost all of their deductions and tax preferences first. They assumed, as Romney has promised, that the reforms would spare the portions of the tax code that privilege saving and investment. They even ran a simulation in which they used a model developed, in part, by Greg Mankiw, one of Romney’s economic advisers, that posits “implausibly large growth effects” from tax cuts.
The numbers never worked out. No matter how hard the Tax Policy Center labored to make Romney’s promises add up, every simulation ended the same way: with a tax increase on the middle class. The tax cuts Romney is offering to the rich are simply larger than the size of the (non-investment) deductions and loopholes that exist for the rich. That’s why it’s “mathematically impossible” for Romney’s plan to produce anything but a tax increase on the middle class.
A plan that cuts Romney and his super rich pals a huge check at the expense of raising the deficit and increasing taxes on middle class taxpayers. That’s about as big a political blunder as Romney could make at this point in his campaign and still be wearing clothes. It’s such a fuck up that it’s hugely convenient for rivals, and that warrants at least some skepticism that the plan could really that bad.
It’s that bad.
I spent a good chunk of last night and some more time this morning crunching numbers under various assumptions, plus checking the work of others as much as possible in that short period of time . Granted, I’m no expert, but I’m not totally out of my league either: I have a rock-solid background in finance and mathematics. And every scenario I’ve seen along with those wild approximations I tried myself all came out the same. The only one clear way Romney’s plan does not increase the deficit and does not increase taxes on at least some middle class taxpayers is if it is never enacted.
The deal with Bain, both taxes and outsourcing, the overseas hits, superficial but still germane, and now this have changed my mind on where this thing is headed. Whereas a month or two ago I was guessing Romney had a slightly better than 50-50 chance of winning, I’d now say Obama has that same edge. And there’s a long shot outlier that Romney’s numbers could suffer a significant collapse if these self-inflicted wounds continue fester, or if another item pops up that goes against Mittens.