Keeping It Simple

I had written a longer article that went through the madness of proving the tax cut numbers simply didn’t add up in last night’s debate, but realized it might bury the main point — that the Romney tax cuts are another huge giveaway that will help the economy the least among all the ways we could borrow and spend trillions of dollars.

Instead, I focused on a peculiar form of sleight of hand that turned paying the same percentage into paying the same. Here’s the link to my nationalmemo article just published.

Debate Arithmetic, Round Two

Enjoy.

 

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5 Responses to Keeping It Simple

  1. Stephen Jencks says:

    Howard,
    That 60% business was so blatantly misleading that if our electorate falls for it they deserve whatever comes if Romney gets elected.

    • hhill51 says:

      The numbers are out now on the modified version (latest, from last night’s air-headed reply, with the $25K cap on deductions)…. result is still $4 trillion of the $4.8 trillion cut being borrowed and added to the debt over a decade. Take the current $1 trillion deficit, add in the extra spending, and you easily get $2 trillion per year in deficits. Throw in some austerity to kill the public employee unions and few million middle class jobs, take the knock-on effect of that, and we get minus 2% GDP, no investment by private industry, more emergency aid spending, and an even bigger deficit. The spiral down gains momentum, and we pick up right where Bush left off. But imagine all the extra GDP from the nannies and pool boys the top 5% will hire!

  2. Rich McDaniel says:

    The two middle classes–Romney’s and Obama’s.

    When Romney says he wants to eliminate taxes on interest, dividends and capital gains for those making less than $250,000 his middle class says, “Yea!”.

    When Obama’s middle class hears that same thing, they say,”What’s that do for me? I don’t own any stock except what’s in my 401k and my interest is under $10 per year which doesn’t get reported to the IRS.”

    Just whose middle class is the largest, Romney’s or Obama’s?

    • hhill51 says:

      I think those “Romney middle class” guys will freak when they realize what their $750K mortgage, state and local taxes, deductions for two kids in college and generous charitable deductions that add so much to their social life are worth to them.

  3. Conscience of a Conservative says:

    No doubt the numbers behind any Obama or Romney proposal are unlikely to add up. No politicians projections ever appear accurate and tend to be self serving. That said our tax policy is insane, with way too many deductions ,credits and subsidies that favor political supporters of a particular candidate or party and distort economic decision making.

    One example our goal is to decrease dependency on imported fossil fuels, so we give subsidies for people to buy cars from companies receiving gov’t funding, and require higher mpg cars by law, only to see that consumers purchase SUV’s and/or don’t see an incentive to drive less, take alternate transportation or buy a smaller car. In Europe they tax gasoline, which would of course achieve the goals, but is not good politics..

    Another example is the home owner tax deduction that benefits the rich more than the middle class who are able to use it to arb against tax free municipal bond rates. And we forget that the tax free status of mortgage debt was one of the factors that contributed to the mortgage meltdown of 2008.

    Lastly the big corporations have black box accounting units that after lobbying for changes in the tax code are able to manipulate it so thoroughly that they pay virtually no taxes while small to mid size businesses pay higher effective rates.

    Flattening the tax rate would simplify economic decision making, encourage businesses and individuals to use economic basis as oppose to tax basis when making spending and investment decisions and might just result in more economic growth.

    One could argue about the final numbers of an election year campaign promise where increasing the burden on any group or not giving any group a perceived benefit is a clear recipe to losing votes, but the idea has basis.

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