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Why Romney Still Has Work to Do on His Tax Plan

September 28th, 2012 . by economistmom

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Ezra Klein’s “Wonkblog” has put up this very nice “comprehensive guide to the debate over Romney’s tax plan.”  It explains why no one but Romney himself can properly “defend” his tax plan, because no one but Romney himself can decide which part of the doesn’t-add-up math in his plan will have to give.  Is it the deficit reduction?  Is it the protecting the “middle class”–and “middle class” defined how?  Is it protecting capital income from any increase in taxes?  Is it some of the across-the-board tax rate cuts?  So many people have speculated in so many different ways, trying desperately to discredit the Tax Policy Center’s analysis in order to defend the Romney “plan.”  Yet everyone has not only failed to damn the TPC analysis, but also failed to answer the basic question raised by the analysis: what exactly does Mitt Romney really want to do with tax policy? The only one who can put an end to the much-ado-about-what-should-have-been-just-another-boring-tax-analysis chatter is Romney, just coming clean and answering the question honestly.  (And I’m still talking about his tax reform plan and not even his own tax returns.)

8 Responses to “Why Romney Still Has Work to Do on His Tax Plan”

  1. comment number 1 by: AMTbuff

    True, Romney’s plan is not specific and its broad outline appears to be slightly short of meeting all its objectives.

    This is exactly the same problem that Bill Clinton had with the middle class tax cut he proposed in his campaign. The media excoriated him for his lack of specificity. The Tax Policy Center made some assumptions and showed how it wouldn’t work.

    Oh, wait… they didn’t do any of that. Never mind.

    It’s almost as if the media treats different party’s candidates differently.

  2. comment number 2 by: Anna Lee

    It can’t help but make me wonder if the man just wants history to record that someone named Romney was once President or was the first Mormon President. Does he really care about governing? It seems like all he cares about is money and taxes, estate laws, etc. Or maybe he just loves looking down his nose at the peasantry.

  3. comment number 3 by: Brooks / Gordon

    Diane,

    Have the authors of the TPC report said whether or not Romney’s plan still can’t “add up” even if the upper limit on “middle class” / “middle income” were assumed to be $100k (rather than $200k), as Feldstein assumes (even though Romney doesn’t)?

    Feldstein makes a reasonable argument for $100k:
    The $100,000 level corresponds to 21 percent of all taxable returns and a significantly smaller fraction of all households. I think it is very reasonable to say that people in that high-income group are not the “middle class.” The TPC focus on those with AGI over $200,000 limits that group to the top 4 million taxpayers who are three percent of all returns and five percent of all taxable returns.

    IF those numbers are valid, it seems reasonable to me to argue that “middle” income doesn’t reach up to the 95th or 97th percentile of income.

    Again, as I’ve pointed out on previous thread(s), Romney threw that Feldstein assumption under the bus (in his interview on ABC’s This Week), and I do think he should be held to his own standard, but I think nevertheless it’s also worth considering whether or not it’s possible for Romney’s plan to “add up” per Feldstein’s definition of middle income.

  4. comment number 4 by: Brooks / Gordon

    Link for that Feldstein quote: http://gregmankiw.blogspot.com/2012/09/a-reply-from-martin-feldstein.html

  5. comment number 5 by: Brooks / Gordon

    To refine my remark above — “it seems reasonable to me to argue that “middle” income doesn’t reach up to the 95th or 97th percentile of income” — that addresses only the reasonableness of the TPC standard; I would add that it’s also reasonable to define “middle income” as not exceeding the 89th percentile (or higher) as Feldstein does. Obviously one could also consider some point between the two.

  6. comment number 6 by: Patrick R. Sullivan

    ‘…failed to damn the TPC analysis….’

    Is that what economists do? Silly me, I thought they were supposed to be sober analysts.

  7. comment number 7 by: Patrick R. Sullivan

    Btw, does Obama’s plan add up? Last I looked he was shooting for about 19% of GDP in revenue.

  8. comment number 8 by: Rebecca W

    I am always amazed by anyone who takes Ezra Klein seriously. He has no background in tax or economics. Plus, how many times has he flipped flop on his own ideas? This proves he doesn’t know what he is talking about.
    Here are some facts to consider; 500 economists including 5 Nobel Laureates believe Romney’s plan will work. As an accountant I have also reviewed it. I will agree with the Nobel Laureates. I have also reviewed Obama’s plan and whenever the details end with a section that states “Budget Balanced(Year)= Never” then you have a problem.
    Klein is so partisan that his economic musings are pretty much laughable. His grasp of tax implementation is nothing short of a fantasy. He fits the facts to suit his ideas.
    Plus he was at the helm of the Journo list scandal which proves he will do whatever it takes to push his own rhetoric, whether they are true or not.
    Bottom line, Obama has spent 6 trillion in 4 years and there is only so many rich people to soak. There is a lot more money to be made in taxing the middle class. If things become anymore desperate Obama will implement a tax increase he has no choice. He will be a lame duck president with nothing to lose. Are You willing to bet your children’s future on a man who has no idea what he is doing and has proved it? You are more optimistic than me. Maybe you don’t think Romney is the best candidate, but he is a better choice than Obama.