One of the extraordinary but little remarked comments that Mitt Romney made during the second debate was when, asked specifically what deductions he would eliminate in order to pay for his tax cuts (that would cost $5 trillion over ten years), he again avoided being specific but said:
And so, in terms of bringing down deductions, one way of doing that would be say everybody gets — I’ll pick a number — $25,000 of deductions and credits, and you can decide which ones to use. Your home mortgage interest deduction, charity, child tax credit, and so forth, you can use those as part of filling that bucket, if you will, of deductions.
What struck me was the casual “I’ll pick a number”. Two weeks earlier, he mentioned a figure of $17,000, again seemingly off-the-cuff. He seems to think that tax policy is something that can be done on the fly, by picking random numbers, depending on the occasion.
But at least these were definite figures and so the Tax Policy Center had something to work with and ran the numbers for both these deductions limits. They found that the $25,000 cap on deductions would increase revenues by only $1.27 trillion, less than a third of the amount required, while the $17,000 cap would raise $1.66 trillion, or almost exactly a third.
Romney must have picked the number $25,000 because that would be around the average of the itemized deductions that most people claim and would satisfy most people that their present level of exemptions would be untouched. According to the invaluable Tax Policy Center,
Itemized deductions averaged about $26,344 in 2009 for tax units claiming them (figure 2). Married couples filing jointly tended to have higher deductions, averaging nearly $32,000; deductions averaged nearly $19,000 for single filers and almost $20,000 for heads of household.
In order to be revenue neutral, it is clear that his deductions limit would have to be much lower than $17,000, possibly zero, though it has been claimed that even that would not be sufficient. So the ‘new’ Romney-Ryan tax plan gets an F grade again.
Matt Taibbi, in his usual entertaining way, describes how Romney seems to have decided to let himself go and divorce himself from reality altogether and say anything at all if he thinks it will get him elected. In the process he asks the question that I too asked two weeks ago which is that, apart from the unworkable math, there seems to be no point to his tax plan if it is going to be revenue neutral.
I wonder if anyone is going to ask him about this.
there seems to be no point to his tax plan if it is going to be revenue neutral
This! Yes! It’s the same idea as the Bush tax plan except more same-like. And look how well the Bush tax plan helped the economy!
Why was this question never asked in the debates?
I think we can safely assume that the 1% are not going to be paying more.
Via Ballon Juice, we get this post at Forbes which recaps Obama’s claims, but has a comment/update this thing from the Wall St Journal (pdf) from August which claims to explain how it really succeeds.
I’d like to see K-Thug comment on it.
Romney is the worst puppet I’ve seen, so far. I don’t know how anyone is actually taking him seriously. Sure, I know that what I hear out of the people that surround me at my workplace are only voting for the lying scum because they can’t stand the idea of a black president. They are not even whispering their racial slurs. But what about people who sincerely think this guy is the better candidate? What are they hearing that I’m not?
If you listen carefully, Romney DOES spell it out for you.
His argument is that by cutting taxes on the rich, the economy will grow and replace the lost revenue.
Just like it failed to do the LAST time and the time before that. Except it will work THIS time. Because freedom.
More supply side hokum by Mendacious Mitt.
If we grant him (the obviously false, but bear with me) idea that his plan will be revenue neutral, I *think* the idea he’s going with is that, while the cuts and increases will balance out, the AREAS he’s cutting compared to where he’s increasing will stimulate the economy as a whole? That’s the closest thing to an intelligible thought I could wrangle from his ramblings.
And further, look how incoherent this is in light of his insistence on pegging military spending to GDP, which is an enormous increase. It really is his magical supply-side thinking that the economy will be so awesome, the growth so huge and so infinitely sustainable that the cost of everything else the government does (that he doesn’t axe) won’t be a problem even in the face of his giant military increases. Right?
Same old trickle down bullshit. Year in and year out.
What are they hearing that I’m not?
Probably the same dog whistles that your openly racist colleagues are hearing. Or they have read the (horrifying) list of advisers with whom Romney has surrounded himself, and like what appears on their résumés.
More from the tax policy center, this time re the standard deduction:
Floaters are floated suggesting that the standard deduction could be abolished. This would target the lucky-ducky 47% and be of particular interest--or something--to the olds, many of whom don’t post enough Schedule-A deductions to cross the standard-deduction threshhold.
Why was this question never asked in the debates?
Because the debate wouldn’t have happened if they had a question like that on the pre-approved questions list.
Yes, if this isn’t public knowledge, the debates are run in concert by the two campaigns for the benefit of the two campaigns (that’s how they shut out the third parties, etc.) This is why it was so laughable when FOX ran the conspiracy theory about the VP debate moderation — as if the Romney campaign didn’t agree to the format, moderation, and questions weeks in advance. It wasn’t a conspiracy that Raddatz asked questions they knew she would ask and tried to hold them to time limits they already agreed to, or that she was the moderator agreed to.
The debates are not an exercise in journalism, even though a journalist moderator sometimes gets away with making news. That the campaigns choose journalists as debate moderators is part of the theater — they could just as easily choose actual debate moderators (moderators with experience from say debate tournaments) but that wouldn’t add the same veneer of truthiness.
It continues to astound me that someone can get this far in the presidential election without being able to show a specific financial plan.
For those of us in the non-oligarchy, one couldn’t get a job as a CPA with that line of nonsense.
Ridiculous.