Quote:

---

I can describe Mitt Romney’s tax policy promises in two words: mathematically impossible.

Those aren’t my words. They’re the words of the nonpartisan Tax Policy Center, which has conducted the most comprehensive analysis to date of Romney’s tax plan and which bent over backward to make his promises add up. They’re perhaps the two most important words that have been written during this U.S. presidential election.

If you were to distill the presumptive Republican nominee’s campaign to a few sentences, you could hardly do better than this statement of purpose from the speech Romney delivered in Detroit, outlining his plan for the economy: “I believe the American people are ready for real leadership. I believe they deserve a bold, conservative plan for reform and economic growth. Unlike President Obama, I actually have one -- and I’m not afraid to put it on the table.”

The truth is that Romney is afraid to put his plan on the table. He has promised to reduce the deficit, but refused to identify the spending he would cut. He has promised to reform the tax code, but refused to identify the deductions and loopholes he would eliminate. The only thing he has put on the table is dessert: a promise to cut marginal tax rates by 20 percent across the board and to do so without raising the deficit or reducing the taxes paid by the top 1 percent.

The Tax Policy Center took Romney at his word. They also did what he hasn’t done: They put Romney's plan to the test

Favorable Conditions

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.

The Romney campaign offered two responses to the Tax Policy Center’s analysis, one more misleading than the other.

First, the campaign called the analysis “just another biased study from a former Obama staffer.” That jab refers to Adam Looney, one of the study’s three co-authors, who served in a staff role on the White House Council of Economic Advisers under President Barack Obama. But the Tax Policy Center is directed by Donald Marron, who was one of the principals on George W. Bush’s Council of Economic Advisers. Calling the Tax Policy Center biased simply isn’t credible -- a point underscored by the fact that the Romney campaign referred to the group’s work as “objective, third-party analysis” during the primary campaign.

Then the Romney campaign said, “The study ignores the positive benefits to economic growth from both the corporate tax plan and the deficit reduction called for in the Romney plan.” There’s a reason the study ignores those “positive benefits”: Romney has called for a revenue-neutral corporate tax plan that brings the rate down from 35 percent to 25 percent while also promising to balance the budget. He has not said how he will achieve either goal. Until he does, those positive benefits -- if they exist -- are impossible to calculate.

Regressive Cuts

If Romney tries to pay for his tax cuts by reducing spending, the results, as the Tax Policy Center notes, would be even more regressive. Romney has promised to increase defense spending and hold benefits steady for the current generation of seniors. The only remaining big spending programs are those that help the poor; that’s where Romney’s cuts would have to be concentrated. Paying for tax cuts for the rich by curtailing programs for the poor is even more of a reverse-Robin Hood act than paying for tax cuts for the rich by cutting the tax expenditures (deductions and the like) of the middle class.
....

The Romney campaign has not provided good answers to the questions raised by its own math. But we already knew the Romney campaign didn’t have good answers. If Romney had good answers, he would have made good on his rhetoric and put his plans on the table.
....

---

Quote:

---

President Obama is hammering Mitt Romney‘s economic plan anew on the campaign trail, based on a just-released study by the non-partisan Tax Policy Center that found Romney’s plan would raise taxes on 95% of Americans, while delivering an $87,000 cut for millionaires. The Romney campaign pushed back by calling the study “biased,” and the Tax Policy Center a “liberal” group. As TPM points out, though, that same Romney campaign sang a different tune about the Tax Policy Center in November.

In a campaign speech in Akron, Ohio today, the President cited the Tax Policy Center report while attacking Romney’s plan, telling the vocal crowd “the centerpiece of my opponent’s entire economic plan is not only to extend the Bush tax cuts, but then to add a new $5 trillion tax cut on top of it. The bulk of this would go to the wealthiest Americans. A lot of it would go to the top 1 percent. Pay attention here — folks making more than $3 million a year — the top one-tenth of 1 percent — they would get a tax cut under Mr. Romney’s plan that is worth almost a quarter of a million dollars — $250,000 they would save under his plan.”

To boos from the audience, the President continued, “Hold on, it gets worse. My opponent says he’s going to pay for this $ 5 trillion plan, but under this plan guess who gets the bill for these $250,000 tax cuts? You do. And you don’t have to take my word for it. Just today, an independent, non-partisan organization, they crunched all the numbers. They looked at his plan. This wasn’t me, it wasn’t my team. This was an independent group. One of the guys who did the analysis used to work for Bush.”

The Romney campaign put out a statement this afternoon from Policy Director Lanhee Chen, which read, in part, “This is just another biased study from a former Obama staffer that ignores critical parts of Governor Romney’s tax reform program, which will help the middle class and promote faster economic growth.”

Their substantive problem with the study is that it did not assume unrealistic growth from Romney’s plan, but the study concluded that even assuming large growth, “revenue neutrality would still require large reductions in tax expenditures and would likely result in a net tax increase for lower- and middle-income households and tax cuts for high-income households.”

The study also calculated the cuts necessary to achieve revenue neutrality in a way that made the outcome as progressive as possible, yet still found that the very wealthiest would reap the benefits, while the rest of us picked up the bill.

While the Romney campaign tries to cast aspersions on the Tax Policy Center today, TPM points out that they gave the group their seal of approval as recently as November:

Quote:

---

Romney Campaign Praised Tax Policy Center That They Now Call ‘Biased’ And ‘Liberal’


While the Romney campaign hasn’t rebutted the substance of the study, they claim the Tax Policy Center should be dismissed entirely as a biased source.
But the Obama campaign notes that Romney aides took a very different view of the group when they put out a similar analysis of Rick Perry’s tax plan during the Republican primaries. Here’s how a Romney press release in November described their work: Objective, Third-Party Analysis Showed Governor Perry’s Plan Would Raise Taxes On Millions Of American Families – But He Doesn’t Seem Interested In The Discussion.

---

That’s right, folks, Mitt Romney’s campaign was for the Tax Policy Center before they were against it.

---

Quote:

---

The Romney Plan (Updated)

In his campaign for the Republican presidential nomination, Mitt Romney has proposed permanently extending the 2001-03 tax cuts, further cutting individual income tax rates, broadening the tax base by reducing tax preferences, eliminating taxation of investment income of most individual taxpayers, reducing the corporate income tax, eliminating the estate tax, and repealing the alternative minimum tax (AMT) and the taxes enacted in 2010’s health reform legislation. The Tax Policy Center (TPC) has completed a preliminary analysis of the Romney plan, based on information posted on the campaign website and email exchanges with campaign policy advisors. Because we have received no details on proposals to reduce tax preferences, the TPC analysis does not include those proposals.1


Description of Plan

Governor Romney would permanently extend all the 2001 and 2003 tax cuts now scheduled to expire in 2013, repeal the AMT and certain tax provisions in the 2010 health reform legislation, and cut individual income tax rates by an additional 20 percent. He would also expand the tax base by cutting back tax preferences, but has supplied no information on which preferences would be reduced. Tax provisions in the 2009 stimulus act and subsequently extended through 2012 would expire. These include the American Opportunity tax credit for higher education, the expanded refundability of the child credit, and the expansion of the earned income tax credit (EITC). The plan would also eliminate tax on long-term capital gains, dividends, and interest income for married couples filing jointly with income under $200,000 ($100,000 for single filers and $150,000 for heads of household) and repeal the federal estate tax, while continuing the gift tax with a maximum tax rate of 35 percent.2

The plan would reduce the six current income tax rates by one-fifth, bringing the top rate down from 35 percent to 28 percent and the bottom rate from 10 percent to 8 percent. The accompanying repeal of the AMT would increase the tax savings from the rate cuts—without that repeal, the AMT would reclaim much of the tax savings.

The plan would recoup the revenue loss caused by those changes by reducing or eliminating unspecified tax breaks, thereby making more income subject to tax. Gov. Romney says that the reductions in tax breaks, in combination with moderately faster economic growth brought about by lower tax rates, will make the individual income tax changes revenue neutral compared with simply extending the 2001 and 2003 tax cuts. He also promises that low- and middle-income households will pay no larger shares of federal taxes than they do now.

At the corporate level, the Romney plan would make two major changes: 1) reduce the corporate income tax rate from 35 to 25 percent and 2) make the research and experimentation credit permanent, It would also extend for one year the full expensing of capital expenditures and allow a “tax holiday” for the repatriation of corporate profits held overseas. The plan does not specify, however, whether repatriated earnings would face any tax and, if so, at what rate. In the longer run, Gov. Romney would reduce the corporate rate further in conjunction with base broadening and simplification and would move the corporate tax to a territorial system.

Gov. Romney would also permanently repeal the 0.9 percent tax on wages and the 3.8 percent tax on investment income of high-income individual taxpayers that were imposed by the 2010 health reform legislation and are scheduled to take effect in 2013.

Because Gov. Romney has not specified how he would increase the tax base, it is impossible to determine how the plan would affect federal tax revenues or the distribution of the tax burden. TPC has analyzed instead the effects of the specified proposals in the Romney plan. These estimates provide a guide as to how much the base broadening would need to raise taxes in different income groups to achieve the plan’s targets.

TPC’s analysis measures the change in tax liabilities against two alternative baselines: current law, which assumes that the 2001-10 tax cuts all expire in 2013 as scheduled, and current policy, which assumes that the 2011 law is permanent (except for the one-year payroll tax cut and temporary investment incentives).3 Compared with the current law baseline, the Romney plan (absent base broadening) would cut taxes for about three-fourths of taxpayers by an average of more than $7,000. In contrast, compared with current policy, about 11 percent of tax units would see their 2015 taxes go up an average of nearly $900 while 70 percent would get tax cuts averaging almost $4,300. The tax increases reflect the expiration of three provisions enacted in 2009: the American Opportunity Tax Credit and the expansion of the earned income credit and the child credit.

Also in the absence of such base broadening, TPC estimates that on a static basis, the Romney plan would lower federal tax liability by about $900 billion in calendar year 2015 compared with current law, roughly a 24 percent cut in total projected revenue. Relative to a current policy baseline, the reduction in liability would be about $480 billion in calendar year 2015.

Sources


Tax: Fairer, Flatter, and Simpler

Appendix: Detailed List of Assumptions Underlying Analysis

Based on the campaign's summary and Gov. Romney’s statements, TPC assumes that the 2001-03 tax cuts become permanent but that temporary tax cuts enacted in 2009 and 2010 are allowed to expire. Provisions that are permanently extended include marriage penalty relief, the 0 percent and15 percent tax rates on long-term capital gains and qualified dividends, and the higher amounts and increased refundability of the earned income tax credit and child tax credit enacted in 2001. The American Opportunity tax credit would expire and be replaced by the permanent Hope tax credit for higher education. The temporary reduction in the phase-in threshold for refundability of the child credit and the increase in the EITC for larger families enacted in 2009 would also expire in 2013 as scheduled.

Individual income tax rates decline by 20 percent, as shown:





Current Rate
10%
15%
25%
28%
33%
35%

New Rate
8%
12%
20%
22.4%
26.4%
28%

Of particular importance are details of applying the exemption of investment income (long-term capital gains, dividends, and interest income) for most taxpayers with income less than threshold amounts ($200,000 for married couples, $100,000 for single returns and $150,000 for heads of households). We assume that all other income is counted first in determining whether investment income is subject to tax. Therefore, for any married couple with income from other sources above $200,000, all capital gains, dividends, and interest would continue to be subject to current tax rules.

For taxpayers with other income below the relevant threshold, the maximum exemption for investment equals the threshold minus other income. For example, a married couple with $150,000 of income from sources other than long-term gains, dividends, and interest would pay no tax on the first $50,000 of investment income and statutory tax rates on any investment income in excess of $50,000. This income would face current statutory rates—0 percent or 15 percent for long-term gains and qualified dividends and as high as 35 percent on other dividends and interest income.

Because non-qualified dividends and interest income would face higher statutory rates than long-term gains or qualified dividends, we assume that the former would be exempt ahead of the latter. Thus, a couple with $150,000 in other income, $40,000 in interest income, and $30,000 in qualified dividends would pay no tax on the interest income and $10,000 of the dividends but would pay tax on the remaining $20,000 of qualified dividend income.

The plan would allow businesses to continue to claim the research and experimentation credit, which is scheduled to expire under current law (but is assumed to be extended in the current policy baseline).

--------------------------------------------------------------------------------


1 Gov. Romney’s tax plan is contained in “Tax: Fairer, Flatter, and Simpler." TPC obtained additional information about details of the plan from campaign policy advisors.

2 Gift tax provisions would follow 2010 law: $1 million lifetime exemption and a 35 percent top rate.

3 TPC assumes that the full burden of corporate income taxes falls on owners of capital in proportion to their income from capital. Under alternative assumptions that allocate some of the burden to workers, tax changes from the Romney plan would be distributed differently. Tax units with the highest income would receive smaller tax cuts on average and low- and middle-income tax units would receive slightly smaller average tax increases or slightly larger average tax cuts than the distribution tables show. The results shown in the distribution tables would be little changed for the bottom 99 percent of tax units and the overall pattern of tax changes would be qualitatively the same—the largest tax cuts as a share of after-tax income would go to the highest income taxpayers.

---

Quote:

---

Originally posted by SIGNYM:

[Romney is] making the same promises Reagan made, which didn't make sense then and don't make sense now. And those are:

Lower taxes
Maintain the military budget (and social security)
Reduce the deficit

---

It's worse than that; he's actually proposing a massive INCREASE in the military budget.



http://www.americanprogressaction.org/issues/2012/07/romney_defense.ht
ml





"I supported Bush in 2000 and 2004 and intellegence [sic] had very little to do with that decision." - Hero

Quote:

---

Originally posted by kpo:
Just declare an intention to balance the budget, but decline to say exactly HOW. And hope the public don't question it too much.

I fear it might work.

---

Quote:

---

Romney says that the reductions in tax breaks, in combination with moderately faster economic growth brought about by lower tax rates, will make the individual income tax changes revenue neutral compared with simply extending the 2001 and 2003 tax cuts

---

Quote:

---

Originally posted by Hero:

As for Romney's "plan"...its premature to declare a plan to be impossible without reviewing that plan's specific provisions. This article is cojecture at best and an outright lie at worst. If they want to be critical of his failure to provide specifics...that is fine, but this analysis makes up its own specifics in order to reach its conclusion and that is not good policy analysis or journalism.

---

Quote:

---

The only thing he has put on the table is dessert: a promise to cut marginal tax rates by 20 percent across the board and to do so without raising the deficit or reducing the taxes paid by the top 1 percent.

---

Quote:

---

As for Romney's "plan"...its premature to declare a plan to be impossible without reviewing that plan's specific provisions. This article is cojecture at best and an outright lie at worst.

---

Quote:

---

Here’s what they did. They took Romney at his word that he plans to offset his cuts in income tax rates by broadening the base, that is, limiting exemptions and other loopholes. They also assumed, however, that Romney would not be willing to tax dividends and capital gains as ordinary income, since he has made it clear that he opposes any rise in taxes on investment income. As they point out, this leaves a relatively small pool of loopholes to close – big enough that the Romney tax cuts could, in principle, be paid for by base broadening, but not with a lot of room to spare.

So which loopholes are closed? TPC made the most Romney-friendly assumption they could – namely, that base broadening is concentrated on top incomes as much as possible. First you eliminate all deductions that benefit those with more than $1 million in income; then all that benefit those with between $500,000 and $1 million; and so on.

The key point is then that even if you do this, the tax cuts Romney gives high-income Americans are bigger than the loopholes he could conceivably close:

This means that even on the most favorable assumption, the Romney plan would give the rich big tax cuts on net – which means that to be revenue-neutral, it must raise taxes on Americans making less than $200,000 a year.

So they’re actually giving Romney every possible benefit of the doubt – and still his plan is a redistribution from the middle class to the rich. In practice it would surely be much worse.

---

Quote:

---

Originally posted by SIGNYM:

Some extended quotes from an article on one of my favorite business websites, Reuter's Counterparties, which has reprinted this article from another business outlet (Bloomberg). Anyway, if you read only one business site, go to Counterparties
http://counterparties.com/

Quote:

---

I can describe Mitt Romney’s tax policy promises in two words: mathematically impossible.

Those aren’t my words. They’re the words of the nonpartisan Tax Policy Center, which has conducted the most comprehensive analysis to date of Romney’s tax plan and which bent over backward to make his promises add up. They’re perhaps the two most important words that have been written during this U.S. presidential election.

If you were to distill the presumptive Republican nominee’s campaign to a few sentences, you could hardly do better than this statement of purpose from the speech Romney delivered in Detroit, outlining his plan for the economy: “I believe the American people are ready for real leadership. I believe they deserve a bold, conservative plan for reform and economic growth. Unlike President Obama, I actually have one -- and I’m not afraid to put it on the table.”

The truth is that Romney is afraid to put his plan on the table. He has promised to reduce the deficit, but refused to identify the spending he would cut. He has promised to reform the tax code, but refused to identify the deductions and loopholes he would eliminate. The only thing he has put on the table is dessert: a promise to cut marginal tax rates by 20 percent across the board and to do so without raising the deficit or reducing the taxes paid by the top 1 percent.

The Tax Policy Center took Romney at his word. They also did what he hasn’t done: They put Romney's plan to the test

Favorable Conditions

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.

The Romney campaign offered two responses to the Tax Policy Center’s analysis, one more misleading than the other.

First, the campaign called the analysis “just another biased study from a former Obama staffer.” That jab refers to Adam Looney, one of the study’s three co-authors, who served in a staff role on the White House Council of Economic Advisers under President Barack Obama. But the Tax Policy Center is directed by Donald Marron, who was one of the principals on George W. Bush’s Council of Economic Advisers. Calling the Tax Policy Center biased simply isn’t credible -- a point underscored by the fact that the Romney campaign referred to the group’s work as “objective, third-party analysis” during the primary campaign.

Then the Romney campaign said, “The study ignores the positive benefits to economic growth from both the corporate tax plan and the deficit reduction called for in the Romney plan.” There’s a reason the study ignores those “positive benefits”: Romney has called for a revenue-neutral corporate tax plan that brings the rate down from 35 percent to 25 percent while also promising to balance the budget. He has not said how he will achieve either goal. Until he does, those positive benefits -- if they exist -- are impossible to calculate.

Regressive Cuts

If Romney tries to pay for his tax cuts by reducing spending, the results, as the Tax Policy Center notes, would be even more regressive. Romney has promised to increase defense spending and hold benefits steady for the current generation of seniors. The only remaining big spending programs are those that help the poor; that’s where Romney’s cuts would have to be concentrated. Paying for tax cuts for the rich by curtailing programs for the poor is even more of a reverse-Robin Hood act than paying for tax cuts for the rich by cutting the tax expenditures (deductions and the like) of the middle class.
....

The Romney campaign has not provided good answers to the questions raised by its own math. But we already knew the Romney campaign didn’t have good answers. If Romney had good answers, he would have made good on his rhetoric and put his plans on the table.
....

---

http://www.bloomberg.com/news/2012-08-02/romney-tax-plan-on-table-debt
-collapses-table-.html?wpisrc=nl_wonk

---

Quote:

---

Originally posted by SIGNYM:
Geezer, the analysis of Romney's plan is not that he doesn't "plan" to cut taxes... indeed, he grinds on and on obsessively about it... but that it doesn't make sense in the larger picture.

---

Quote:

---

But the convoluted twisting of everything the original Tax Policy study found, and the false "mathematically impossible" quote...

---

Quote:

---

The study concludes that even under the most generous assumptions, "it is not mathematically possible to design a revenue-neutral plan that preserves current incentives for savings and investment and that does not result in a net tax cut for high-income taxpayers and a net tax increase for lower and/or middle-income taxpayers."

---

Quote:

---

Originally posted by SIGNYM:
[Anything Signy Said]

---

Quote:

---

Originally posted by SIGNYM:
Ah, I see you're drinking again. I only reply to peeps who post sober.

---

Quote:

---

Originally posted by SIGNYM:
And if you want to get out of the mess, don't double down on the policies which caused it in the first place.

---

Quote:

---

Originally posted by SIGNYM:
Again, lay off the sauce.

---

Quote:

---

There is no reason for you to say that, and REALLY, you should be held accountable for saying so. I believe that's called Libel, and my homeowner's insurance actually covers against that.

---

Quote:

---

Originally posted by SIGNYM:
Libel? Against who? An anonymous avatar untraceable to a real person?

---

Quote:

---

Originally posted by SIGNYM:
Hey, I've been followed by the FBI because of posts on an "anonymous" board. And I'm sure Homeland Insecurity could get our particulars if they don't have them already. But for this little matter, our identities don't count. We're just peons, really.

---

Quote:

---

Originally posted by SIGNYM:
Hey, I've been followed by the FBI because of posts on an "anonymous" board. And I'm sure Homeland Insecurity could get our particulars if they don't have them already. But for this little matter amongst ourselves, our identities don't count. We're just peons, really.

---