Robert Gibbs asks a good question: Yesterday, on Meet the Press, Robert Gibbs quoted Mitt Romney.
After that, he posed a question to Newt Gingrich. In our view, Gibbs asked a good question:
GIBBS (10/7/12): Let me just say this. Standing on the stage with you in Arizona, this is what Mitt Romney said. “Number one, I said today we're going to cut taxes on everyone across the country, by 20 percent, including the top one percent.”Gibbs was quoting Romney from the February 25 GOP debate in Arizona. Was Candidate Romney being dishonest when he made the highlighted statement?
Mr. Speaker, you mentioned that your opponent, Mitt Romney, had a problem with being dishonest in the primary. My question is, was he dishonest when he said that?
It may be that he was! Three days earlier, Romney had unveiled a new tax proposal. He said he would reduce all income tax rates by twenty percent—and that he would eliminate loopholes to keep the plan revenue neutral.
In a brief rebuttal to Rick Santorum in that Arizona debate, he only mentioned the first part of his new proposal. Was he being dishonest?
It may be that he was! From that point on, Romney had a nice hook at his disposal. If he only mentioned the first part of his two-part tax proposal, he could give conservative voters the impression that people would get lower income tax bills under his proposal.
Of course, under terms of his full proposal, income tax bills would stay the same, due to the loopholes he eliminated! But from now on, Romney could give a pleasing impression if he conflated “taxes” with “tax rates”—and if he failed to mention the second part of the proposal.
Whatever his intention may have been, Romney gave a false impression in that fleeting remark in that one debate. On yesterday’s Meet the Press, here’s how Gingrich answered that question from Gibbs:
GIBBS (10/7/12): Standing on the stage with you in Arizona, this is what Mitt Romney said. “Number one, I said today we're going to cut taxes on everyone across the country, by 20 percent, including the top one percent.”But has Romney changed? In last Wednesday night’s debate, he gave a full account of the full proposal he first advanced in February. (Not eighteen months ago, as Obama twice said, incorrectly.)
Mr. Speaker, you mentioned that your opponent, Mitt Romney, had a problem with being dishonest in the primary. My question is, was he dishonest when he said that?
GINGRICH: I think it’s clear he changed.
GIBBS: We don’t disagree that he changed.
In fact, Romney’s proposal hasn’t changed, although a major study has shown that it’s “mathematically impossible”—that it can’t be enacted exactly as proposed. It’s also a bit clownish to see the way Romney has framed his proposal:
He has been very specific about the carrot—the twenty percent cut in tax rates. At the same time, he has been very vague about the sticks—the deductions he would eliminate.
But uh-oh! By last Wednesday, it was Obama who was aping Romney from that Arizona debate! It was Obama who only mentioned the first part of Romney’s two-part proposal.
Last Wednesday, Obama did what Romney did in the fleeting statement quoted by Gibbs. He mentioned the part of Romney's proposal which involves cutting income tax rates. But he skipped the part about closing tax deductions to keep the plan revenue neutral:
OBAMA (10/3/12): So all of this is possible. Now, in order for us to do it, we do have to close our deficit, and one of the things I'm sure we'll be discussing tonight is, how do we deal with our tax code? And how do we make sure that we are reducing spending in a responsible way, but also, how do we have enough revenue to make those investments?That highlighted statement isn’t exactly false. But it isn’t exactly true either.
And this is where there's a difference, because Governor Romney's central economic plan calls for a $5 trillion tax cut, on top of the extension of the Bush tax cuts—that's another trillion dollars—and $2 trillion in additional military spending that the military hasn't asked for. That's $8 trillion. How we pay for that, reduce the deficit, and make the investments that we need to make, without dumping those costs onto middle-class Americans, I think is one of the central questions of this campaign.
In a better world, a skilled moderator would have helped wring clarity out of this murky discussion. We don’t live in a world like that. We live in a world of Jim Lehrers.
That said, Mitt Romney’s alleged “$5 trillion tax cut” was the star proposal which emerged from Wednesday night’s debate. Here’s our question:
To this day, has any major newspaper or news org really tried to explain this proposal?
In the days leading up to Biden-Ryan, we’ll be trying to answer that question. Has anyone really explained that proposal in anything like a clear, detailed way? More broadly, does our floundering public discourse run on clear information at all?
Reviewing the front page of this morning’s New York Times, our answer is obvious: No.
For one of the most embarrassing “news reports” ever published, go ahead—just click this turkey. Meanwhile, try to find the news report explaining what Romney proposed seven months ago.
Tomorrow: What the Faith Hill has Romney proposed? The Post and the Times don’t agree!
I'm a fan of Bob's, though I think some of the criticism has been valid.ReplyDelete
I do think he is going overboard here. Obama distinctly recognized in the debate that Romney claimed the deficit impact of his 20% cut would be counterbalanced by closing loopholes and deductions, but Obama said, citing that report, that the math didn't add up --- there was no way deductions could be abolished so that middle class taxpayers wouldn't wind up paying more in taxes. The point is that Romney has specifically called for the 20% cut, but hasn't explained at all what deductions are going to go. This is deeply dishonest. (Another unanswered, and more or less ignored, question is if the 20% cut will be offset by taking away deductions, how will there be a stimulus effect from the cuts?)
Will the mortgage interest, charitable and state and local income tax deductions all be eliminated? Will job provided health insurance be taxed? What other ones? How likely is it that Congress will ax these deductions? What kind of job is the press doing asking these questions - not very good as far as I can see.
As long as Romney won't say what deductions heclaims he will abolish, it is justifiable to frame it that $5,000,000,000,000 are being proposed, (plus $2,000,000,000,000 to the military budget), The point is that how will Romney eliminate the deficit with all these tax cuts and extra expenditures?
AC / MA
Yes, it is fair to call it a $5 trillion tax cut, because that's the hole it digs over 10 years. How that hole is filled up is another question.Delete
But you can't simply say that the hole doesn't exist because you intend to fill it up later.
Yes, that is the point. Although Obama may not be getting it all out, Bill Clinton did. Where are these magical loopholes and deductions the elimination of which will pay for the tax rate cuts. It's to be decided. He won't give even a few examples of pernicious deductions that he would favor letting go.ReplyDelete
Even if there are sufficient deductions to eliminate for a revenue neutral effect, he doesn't want to cut taxes so much as move around who does the paying. This begs the question, Who's gonna get hit by this rearrangement, and who gets the breaks? Well, I guess Romney thinks the president proposes tax rate cuts, but lets Congress thrash out the balancing factors.
That's not scary? Where does Congress get its ideas for deductions -- Lobbyists? Will Congress suddenly start ignoring lobbyists when the time comes to decide which deductions to lose? That's what elections are for.
Yep. And following an election in which record amounts of money have been poured into Super PACS and spread all over the country.Delete
Those weren't exactly donations to charity.
"Of course, under terms of his full proposal, income tax bills would stay the same, due to the loopholes he eliminated!"ReplyDelete
Oh, good grief, Somerby! As Jeeves and Anonymous 12:07 expertly point out income tax bills will NOT stay the same. Even if the Romney's plan is indeed "revenue neutral" you cannot possibly jack with rates and deductions and exemptions and "loopholes" without some people paying more, some people paying less.
And guess who that is going to be?
I do want to disagree with 12:07 however when he said the press hasn't been asking these questions. They certainly have been. Both Romney and Ryan, however, have refused to answer no matter how many times the questions are asked and in what format.
Seriously, the Romney/Ryan campaign has raised BS to a performance art form.
To some extent, the press has asked these questions. They get pretty much dwarfed by all the horse race stuff. Aslo, I believe for the most part, the questioning is shallow - they don't discuss what the potential consequences of the deduction closing would be or the nature of the potential deductions. This is one of the biggest issues of the campaign, if not the biggest.Delete
And the beauty contest stuff.Delete
Romney lied through his teeth for 90 minutes, and all they could talk about was how good he looked doing it.
Bob repeats the Obama campaign's claim that a major study has shown that Romney's tax proposal is mathematically impossible — that it can’t be enacted exactly as proposed. If the "major study" referred to is the one by Martin Feldstein of Harvard and Harry Rosen of Princeton, then the Democrats are wrong. Harry Rosen says that the Obama campaign is misrepresenting his paper on Romney's tax plan:ReplyDelete
I can’t tell exactly how the Obama campaign reached that characterization of my work. It might be that they assume that Governor Romney wants to keep the taxes from the Affordable Care Act in place, despite the fact that the Governor has called for its complete repeal. The main conclusion of my study is that under plausible assumptions, a proposal along the lines suggested by Governor Romney can both be revenue neutral and keep the net tax burden on taxpayers with incomes above $200,000 about the same. That is, an increase in the tax burden on lower and middle income individuals is not required in order to make the overall plan revenue neutral.
Dave in Cal blows goats.Delete
I have proof.
D in CDelete
You are wrong, TDH isn't referring the Rosen report, he is refrring to the TPC (Tax Policy Committee, I think) report. Rosen's report is an effort to refute the TPC report by arguing that it is possible that there will be some economic growth tht would offset some of the shortfall after taxes are drastically reduced by 20%. Rosen assumes deductions for mortgage interest, state and local taxes, and charitable donations will be abolished, that interest onmunicipal bonds willbe taxable (result - municipalities will have to pay higher interest on bonds, they'll love that) and employer paid health insurance will be deemed taxable income,but more or less speculates that economic growth (presumably above and beyond the growth that might occur absent Romney's reforms) will mean that middle class taxpayers bills will not have to go up to make the proposal revenue neutral.
Rosen points out that there are all sorts of variables making predictions precarious. There are some variables he doesn't mention - e.g., what effect will massive decrease in federal spending on domestic expenditures as desired (yearningly) by Republicans, have on the economy?
I'd like you to state, D in C, which specific tax deductions or preferences do you envision being eliminated under Romney's proposal?
AC in MA
I understood that what Obama was pointing out in the debate was how much the tax cuts alone would total. The second part of his argument is that even eliminating every deduction, including home mortgage, health care and charitable contributions, you could not make up enough to make the tax cuts revenue neutral, but if the author wants to deliberately misinterpret what was said there's nothing I can do about it. It's certainly disappointing though.ReplyDelete
Exactly. The author was trying 'but they both do it!'.Delete
Actually, wasn't Romneys whole revenue neutral stance only recently brought up, after the quote from Obama's speech that was mentioned in the article?
If it is truly "revenue neutral" but still gives the tax relief Romney promises to businesses to create the new jobs he's promised, then who picks up the difference?Delete
That's the relevant question.Delete
Yep. Whose taxes are going up to pay for the tax relief that will create all those jobs under a revenue-neutral plan?Delete
AnonymousOctober 8, 2012 5:37 PM -- In principle, lower total taxes aren't necessary to create jobs. The theory is that a lower marginal tax rate will encourage entrepreneurs to expand their businesses, thus creating jobs. E.g., before I fully retired a few years ago, I was paying a marginal tax rate of well over 50% on my part-time consulting earnings (federal+state income tax + self-employment tax). If I had been able to keep a greater percentage of what I earned, I might have continued to work.Delete
I'm not sure that reducing the marginal rates would have that big an impact on economic growth. I do think that the corporate income tax is a big job killer. It discourages not only American companies but foreign companies that might set up American operations. If I had the power, I'd reduce the corporate income tax rate to zero.
AC in MA, I think you have a valid point. It's hard to see what deductions Romney could eliminate that would offset a 20% reduction in the rates for personal income tax. IMHO there are good theoretical arguments to make muni bonds taxable and to eliminate the mortgage deduction, but I don't think Congress would touch either of these.
OTOH I don't think President Romney will try very hard to cut the rates another 20%. Just maintaining them at the Bush level will require lots of clout.
I do think that the economy would do a lot better under Romney than under Obama. So tax receipts under Romney would be higher to that extent. That difference could be large. However, we'll never know. Whichever of them wins, we'll never know how things would have gone had the results gone the other way.
Oh, I get it. It wasn't the taxes you paid, it was the rate. But you could have stayed in business if you were "able to keep a greater percentage of what I earned."Delete
Which means your tax bill didn't need to go down, just your rate.
Now I would think most smart businessmen would look at the bottom line -- what does this mean in actual dollars and cents?
And if it meant nothing, why on earth would you think that was a good thing?
What will create jobs?ReplyDelete
We have seen that cutting corporate and capital gains taxes do not inspire the "Job Creators" to become Hank Reardons, and build vast new enterprises.
Are the tax cuts supposed to stimulate consumption?
If so, they are an inefficient way to achieve this, multiplier function-wise.
Multiplier function for permanent tax cuts:
Make Bush cuts permanent .29
Make dividend and CG cuts permanent .37
Cut corporate tax rate .30
MF for spending increases:
Marginal increase in food stamps 1.73
increase in infrastructure spending 1.59
And that's just a tiny part of the picture.
We have seen that cutting corporate and capital gains taxes do not inspire the "Job Creators" to become Hank Reardons, and build vast new enterprises.ReplyDelete
I don't know where you've seen this, gravymeister, but I saw the reverse in Hamilton, Bermuda. Because of their zero income tax, Bermuda has become a center of innovative financial companies. (Bermuda has no personal or corporate income tax; the latter is the key, because corporate income is so much higher than the sum of the employees' personal income.)
Other than the corporate income tax advantage, being based in Bermuda is a negative. There aren't enough locals with the specialized skills, so employees have to be recruited from abroad, mostly the US, Canada, and the UK. That's very expensive, because people won't move there unless they're very well paid. Also, the cost of living on the island is high. Most expats get tired of living there, because it's a small island and because the expats usually don't find their way into the general Bermuda society.
Despite these disadvantages, a huge share of the world's reinsurance business has moved there. Can you imagine how many of these companies would move to the US, if we had zero corporate income tax, but without Bermuda's disadvantages.
"That's very expensive, because people won't move there unless they're very well paid."Delete
Right. Who wants a job an "innovative financial job" Bermuda that requires "specialized skills" when those jobs are so plentiful in the U.S.?
After all, who wants to live in Bermuda, with all its "disadvantages"? After all, it is sooo hard to crack into Bermuda society. Darlings! No one will come to your dinner party!
"I don't know where you've seen this.."ReplyDelete
I've seen it here in the USA, the Bush tax cuts being the most recent example.
I'd be willing to have zero corporate income tax in exchange for the corporate death penalty. If they break the law, they don't get fined (which they just pass along as a cost to their customers). They get liquidated.
I keep forgetting how clueless you are, David.ReplyDelete
The failure to create new businesses or expand existing ones is right here in good ol' USA.
Anyone paying attention would know that.
Economists and politicians of all stripes agree we are in a recession, the only difference among them is who they blame.
Comparing a small island in the Carribbean that has found a niche shuffling other people's money around is not "apples to oranges", it's "watermelons to grapes."
Besides,Bermuda didn't create the reinsurance business, they only created a variation of it; essentially another game of chance for wealthy gamblers.
OK, so Romney's proposed tax cut isn't $5 trillion and it isn't revenue neutral. As the famous man once said, now we're just negotiating.ReplyDelete
To answer your question : not so much ! Debates have more to do with looking/seeming 'presidential'. You need to flaunt your hands and arms about a bit to dispel suspicion your near ancestry may have included one or two 'cigar store indians'. Going on : it could cost you 1% or 2% nationwide to come out in anything less than a 'borderline' tie. And it was very important to me(alas !) that Obama continue in good form in the 'haberdashery aspect'. Romney's could be said to 'pass', if only marginally. I couldn't have completely disqualified his candidature....upon that single choice - being cognizant that I may not be the most objective observer overall.ReplyDelete