Romney's tax plan would raise taxes on 95% of Americans

[Bouncer]

@Jas09

If those deductions, as well as all other tax expenditures for those making >$200k (health insurance, mortgage interest, charitable giving, etc…) are all eliminated then I will concede that Romney can in fact cut the rates, remain revenue neutral, and not raise taxes on the lower 95% of income earners..

There would be pitchforks and torches swarming up Pennsylvania Ave if you touch, or even hint of touching, the Mortgage Interest deduction. We have not the firepower to stop the mobs that would form.

Which means that part of Romney’s plan is out the same way that using nuke’s for gardening is out. It’s just out.

Regards,
-Bouncer-

[Jas09]

Well, without the mortgage interest deduction you can’t get to revenue neutrality without hitting the bottom 95% pretty hard - it’s something like the 2nd or 3rd largest deduction and is a rather progressive (or regressive, I guess) deduction.

I don’t really agree with your political analysis, however. I think it’s politically viable to cap the deduction, for example - or at least not political suicide to suggest it. Although you do point out the precise reason why Romney’s plan is so vague - once you name the deductions you want to eliminate you start making enemies. But cutting marginal rates is something everybody loves. Ice cream now, brussel sprouts maybe later…

[Shodan]

@Rand_Rover

So, this thread sunk like a stone after I posted the debunking, with very little commentary on it (most of which was non-responsive dismissal based on source). Par for the course around here, I guess.

Let’s not get all nitpicky - 55% and 95% are practically the same number in Democratic arithmetic.

Regards,
Shodan

[Ravenman]

@Rand_Rover

Debunked: http://online.wsj.com/article/SB10000872396390443404004577581570978359112.html

http://online.wsj.com/article/SB10000872396390443792604577574910276629448.html

I’m looking at those two cites and I have a question. When AEI/WSJ and TPC disagree on the two tax exclusions, the WSJ asked a Romney advisor if those exclusions were part of Romney’s plan or not. The advisor said that the exclusions were “on the table.” Not that the exclusions would be eliminated, not that they would not be eliminated. They were “on the table.” In what branch of fiscal planning is it a legitimate practice to take credit for tax increases which are merely under consideration, rather than being actually proposed?

The problem is that NOBODY knows what Romney’s plan really is, other than laying out several goals with no specifics. It is impossible to analyze in detail. What the TPC did was basically what any doctor would do if I tried to sell a diet plan that was based on these principles: 1) lose 20 pounds in two months, 2) keep eating your favorite foods, 3) no more than three visits to the gym each week, 4) it’s so easy anyone can do it!

A doctor would poke all sorts of holes in such a plan, like it is not possible to lose that much weight without giving up chocolate cake, or that those three visits to the gym must be several hours long. If I respond that avoiding chocolate cake may or may not be part of the plan, I haven’t debunked the doctors’ criticisms. I’ve just obfuscated even more.

The other comment is that the basis of the WSJ editorial is an analysis by an AEI scholar, Matt Jensen. Mr. Jensen’s academic credentials appear to be based on receiving a BA in mathematics from Pomona College in 2010. The TPC analysis was done by a team that included a 1987 PhD in economics from Stanford, and another with a 2004 PhD in economics from Harvard. Call me crazy, but I am inclined to think that there should be a little more academic horsepower behind this “debunking.”

[Bosstone]

@Shodan

Let’s not get all nitpicky - 55% and 95% are practically the same number in Democratic arithmetic.

Funny, given that conservative thinking reacts to a 40% top marginal tax rate exactly the same as a 95% rate.

[Rand_Rover]

@Exapno_Mapcase

I just came into this thread and looked at these cites.

Both are of course op-ed pieces from the Wall Street Journal. For some strange reason I can’t find any bylines so I don’t know who wrote them.

You can consider them debunking only if you take that as a premise and believe everything they say.

Yet the first article can rebut the accusation that the plan would raise taxes only by adding an assumption that Romney would close tax loopholes that he has not yet said he would. Since closing those are the equivalent of tax increases it is flatly impossible to believe that any Republican-controlled Congress would approve these changes. Therefore, the tax increases would stand. You can make any number work if you disregard reality.

The second article reiterates the standard spiel about how tax cuts increase revenues, although it can’t actually give any specifics about how Romney’s plan will do so because the plan contains none.

This is of course a problem for critics of the plan as well. They must make assumptions about what changes will actually be made. Antis will make negative assumptions; pros will make positive assumptions.

The huge overwhelming takeaway is that nobody can ever use (unsigned?) partisan opinion as a declaration of fact. There is no debunking here that anyone who is not already a True Believer in the Wall Street Journal’s ideological bubble could ever accept. The best you can do is play partisan analysis against partisan analysis to get the extremes on both sides of the future, a bit like how hurricane forecasts highlight a wide swathe to include all the models. Reality usually winds up in the middle.

The difference is that partisan economic analyses use imaginary numbers, imaginary policies, and imaginary histories rather than science. I haven’t read through the Tax Policy Center’s full work to see how imaginary their work was, though I assume it uses liberal assumptions. But the WSJ’s op-eds are valueless.

So you haven’t even read the TPC report, but here you are to set us all straight . . .

Look buddy, it’s simple. The TPC report assumed Romney wouldn’t cut X, and then declared that it is impossible for Romney to do his tax plan without raising taxes on 95% of Americans. However, if Romney does cut X, then it is actually possible for Romney to do his tax plan without raising taxes on 95% of Americans.

The bold part above (which I bolded, by the way) has it backwards. Romney hasn’t said anything about what he would cut and not cut. It is the TPC report, not the WSJ piece, that has made the assumption.

[Rand_Rover]

@Jas09

What are you on about? I posted my comment on the “debunking” right here:Do you disagree with part of that?

OK, let’s have more commentary. Do you think that a Romney tax reform plan would be both (a) revenue-neutral and (b) cause tax increases primarily for those in the top 5% of income earners?

Hell, let’s get more to the point - do you think that tax reform should be revenue neutral and lead to increased taxation for the top 5%? Because most economic conservatives believe that the rich currently pay too much and that the poor (especially the bottom third or so) pay too little. Do you disagree with this?

This thread is about the TPC report. People crowed about it when it came out and then disappeared when I showed how it is bunk. That’s the topic here, let’s try to stick to it. Feel free to start your own thread to discuss the above.

[Jas09]

Do you disagree with the conclusion the TPC report reached given the assumptions they made?

Your “debunking” just challenged the assumptions. So I’m discussing the assumptions - I think they are much, much more valid than assuming that Romney will cut all deductions for everyone over $200k first, including extremely popular ones.

And I think the outrage is hilarious considering that broadening the base (which, by definition, means increasing taxes on folks that don’t pay any now) is one of the state goals of the GOP. Just stand on your principles for God’s sake. Don’t lie to me about how your gonna lower everybody’s rates and still keep revenue neutral.

Until Romney lists the tax expenditures he’s cutting to balance this plan only on the backs of the rich, I’m going with the TPC report and agreeing that the most likely outcome is a tax hike on the lower 95%.

[Exapno_Mapcase]

@Rand_Rover

The bold part above (which I bolded, by the way) has it backwards. Romney hasn’t said anything about what he would cut and not cut. It is the TPC report, not the WSJ piece, that has made the assumption.

This is simply not true if you read the WSJ article. It straightforwardly quotes an American Enterprise Institute study that includes two assumptions on closing loopholes that Romney did not make, but a spokesperson said were “on the table” as if that phrase had real-world meaning.

You cannot defend the “debunking” by saying they are allowed to dream up scenarios in which the plan would work but critics cannot state alternate scenarios in which it wouldn’t. That is ideology rather than analysis.

I’m the one who said that since Romney did not give specifics; therefore he doesn’t actually have a plan. The TPC can only make assumptions and the AEI can only make counter-assumptions. The TPC cannot debunk the Romney plan; the AEI cannot debunk the criticism. At most, one can examine the individual statements to determine if they can be defended. That does not go well for you. The AEI scenarios are purest fantasy from a real-world standpoint while the TPC scenarios are guaranteed to happen in our political climate. Whether they are actually relevant to the plan is unknown. But as statements about politics they can be evaluated and the AEI fails that test.

Similarly, your claims flunk common sense. You can’t counter critics by claiming “Romney hasn’t said anything about what he would cut and not cut” as if that were a good thing and his lack of specifics makes anything you say correct. That’s the very opposite of reason.

Your cites don’t hold up. Your argument isn’t one. And your debunking exists only in your mind.

[elucidator]

But doesn’t the American Enterprise Institute have a spotless reputation for cogent analysis and prescient political forecasting? True, the clarity of their non-partisan analysis doesn’t always reach the standards of the WSJ, but still…

[Ravenman]

@Rand_Rover

This thread is about the TPC report. People crowed about it when it came out and then disappeared when I showed how it is bunk. That’s the topic here, let’s try to stick to it.

Well, I’m here now and I wasn’t before. I’m telling you this is not a debunking as anyone would understand the term. The 24 year old mathematician has not upstaged experienced economists.

Do you understand why TPC did not include those exclusions in their calculations? Would you care to comment on their reasons for setting aside those exclusions? Because it seems to me that for the AEI criticism to be valid, a different Romny campaign promise would have to be broken.

Any insight in which Romney campaign promises are actual promises, as opposed to unachievable lies, would be of interest as well.

[Ravenman]

@Rand_Rover

So, this thread sunk like a stone after I posted the debunking, with very little commentary on it (most of which was non-responsive dismissal based on source). Par for the course around here, I guess.

I note with great irony that this thread sunk like a stone once I debunked Rand Rover’s “debunking.”

Christ, it’s like the conservative posters around here can’t even muster up a defense of why a 24-year old liberal arts college grad is smarter than Ivy League-educated PhDs who are suspected liberals!!!