[Vision2020] A Tax Plan That Defies the Rules of Math

[Art Deco]

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August 11, 2012
A Tax Plan That Defies the Rules of Math By DAVID
FIRESTONE<http://topics.nytimes.com/top/reference/timestopics/people/f/david_firestone/index.html>

IN May of 2000, when George W. Bush was running for president on a platform
of extravagant tax cuts for all, his campaign did something that would be
considered remarkable today: it submitted his tax plan to the Congressional
Joint Committee on Taxation, to see how much all those tax cuts would cost
the Treasury.

The bipartisan committee ran through the details provided by the campaign
and predicted that the tax plan would cost about $1.3
trillion<http://www.nytimes.com/2000/05/03/us/2000-campaign-money-issues-spate-numerical-sparring-highlights-fiscal-focus.html?pagewanted=all&src=pm>over
nine years, an underestimate but a clear sign of its high price tag.
With the budget in surplus at the time, Mr. Bush didn’t dispute that cost,
and never tried to pretend that the cuts would be free. Within a decade, in
fact, they would turn out to be the biggest factor in the huge deficit he
created.

Twelve years later, Mitt Romney, the presumptive Republican nominee, claims
his far deeper tax cuts would have a price tag of exactly zero dollars. He
has no intention of submitting his tax plan to the committee or anywhere
else that might conduct a serious analysis, since he seems intent on
running a campaign far more opaque than any candidate has in years.

He has made his economic plan the fundamental basis of his candidacy, and
yet with the Republican convention just two weeks away, we know next to
nothing of the plan’s details. The extreme cuts proposed by his new running
mate, Paul Ryan, are far more hard-edged, making Mr. Romney’s
mathematically impossible promises look vague and shopworn by comparison.

For example, Mr. Romney wants to keep all the Bush tax cuts, then cut taxes
much further, particularly for the rich, but he says the plan won’t grow
the deficit by a dime. He won’t say how he will accomplish this — there are
no real numbers in his plan beyond a vague pledge to eliminate some
loopholes. The Joint Committee would take one look at his substance-free
plan and say, we can’t work with this.

Mr. Romney’s tax proposal is no different from any other aspect of his
economic plan.<http://www.mittromney.com/blogs/mitts-view/2011/09/believe-america-mitt-romneys-plan-jobs-and-economic-growth>He
promises to cut nondefense spending by 5 percent, but won’t tell
voters
what programs that will affect. He wants to repeal all of President Obama’s
regulations that burden the economy, but won’t say which ones. And he
pledges to eliminate health care reform, but won’t discuss how or even
whether he would replace it.

Earlier this month, a nonpartisan group of tax experts took matters into
their own hands and tried to analyze the tax plan. What would happen, they
asked, if you actually made all the cuts he has
proposed<http://www.mittromney.com/issues/tax>?
That would mean extending the Bush cuts, reducing income-tax rates by an
additional 20 percent, and ending capital gains taxes for the middle class,
the estate tax, the alternative minimum tax and the various taxes in health
care reform, including the Medicare tax increase on high incomes. The experts
at the Tax Policy Center
estimated<http://www.taxpolicycenter.org/UploadedPDF/1001628-Base-Broadening-Tax-Reform.pdf>that
this would cost $456 billion a year, starting in 2015.

But Mr. Romney said the cuts would be “revenue neutral” and cost nothing
because they would be paid for by ending tax breaks and loopholes. He never
identified those tax breaks, and now we know why — the experts concluded
that there aren’t enough loopholes in the tax code to balance out the cuts.
Following Mr. Romney’s plan would mean ending popular deductions for
mortgage interest and charitable contributions, which would wind up raising
taxes on the middle class, while the rich would still enjoy the benefits of
an income-tax cut larger than the deductions they would lose.

Had Mr. Romney been the least bit serious about assembling a real tax plan,
he would have known this. Instead, he hurriedly threw together his 20
percent tax-cut
plan<http://thecaucus.blogs.nytimes.com/2012/02/22/romney-details-tax-overhaul-urging-lower-rates-and-fewer-deductions/>a
week before the Arizona and Michigan primaries in February, at a time
when Rick Santorum was proposing a similar idea. He said he wouldn’t touch
middle-class tax breaks, and would “work with
Congress<http://firstread.nbcnews.com/_news/2012/05/18/11757714-romneys-day-one-what-do-we-know-about-his-plan?lite>“
to find offsets to the cuts.

“Work with Congress.” Would that be the same body that almost caused a
government default last year? Given how dysfunctional Congress has become,
the real question is what policies a president will demand of Congress, and
how forcefully he will fight for them. Telling voters that Congress will
decide which tax breaks to eliminate is saying that you don’t have the
courage to make a choice.

On issue after issue, the dominant theme of Mr. Romney’s plan is a refusal
to make real choices. He talks endlessly about his 59-point plan “to get
America back to work,” but you can scrutinize all 160 pages of his economic
booklet without finding any evidence of decision-making. A few examples:

He says he wants to cut nondefense spending by 5 percent, and cap federal
spending at 20 percent of the economy, down from about 24 percent. But what
would that actually mean in terms of programs cut and services reduced? The
plan is silent. The programs he mentions
cutting<http://www.mittromney.com/blogs/mitts-view/2011/11/romney-presents-plan-turn-around-federal-government>are
the comically minuscule national endowments for the arts and the
humanities, foreign aid, family planning, Amtrak and a few others — all
tattered Republican punching bags.

The plans Mr. Ryan submitted as House budget chairman — which are now Mr.
Romney’s too — were never models of clarity, but they at least made his
priorities quite stark: more than three-fifths of his
cuts<http://www.cbpp.org/cms/index.cfm?fa=view&id=3723>would come from
low-income programs like job training, Pell grants and food
stamps. That’s not something Mr. Romney ever talked about on the stump,
raising the question of whether the vice-presidential choice will end up
defining the man at the top of the ticket better than Mr. Romney has
himself.

Mr. Romney wants to offload federal responsibility for Medicaid and move it
entirely to the states by turning it into a much cheaper block-grant
program. He claims this approach would save $200 billion a year, but never
mentions that this would force states to drop coverage for at least 14
million people when states are unable to keep up with rising medical costs,
which would raise emergency costs at local hospitals. He says he supports
Mr. Ryan’s plan to provide the elderly with a fixed amount to buy either
traditional Medicare or private plans, but has also said he would issue his
own Medicare plan<http://abcnews.go.com/blogs/politics/2011/06/romney-talks-to-abc-news-about-health-care-jobs-ties-and-red-sox/>this
fall, far too late.

Beyond his standard line about undoing financial reform and Mr. Obama’s
“anti-carbon” agenda, Mr. Romney has also vowed to repeal any Obama
regulation that might burden the economy, without telling us which ones.
Could he mean the power-plant rule that keeps mercury out of children’s
lungs, perhaps <http://epa.gov/mats/actions.html>? Or the one requiring better
brakes <http://www.nhtsa.gov/Laws+&+Regulations/Brakes> on big trucks? Or
the one expanding disability
protections<http://www.eeoc.gov/eeoc/newsroom/release/3-24-11.cfm>to
people with AIDS or autism? Don’t expect an answer.

The Romney campaign decided long ago that it didn’t need a real economic
plan of its own when it could just bash the president’s. “As long as I
continue to speak about the economy, I’m going to
win<http://www.cbsnews.com/video/watch/?id=7413952n>,”
he said last month. Voters, he is saying, need not inquire further.

By David Firestone, a member of the New York Times editorial board.


-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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