Wednesday night, Republican presidential nominee Mitt Romney added to the myriad of promises that make up his part-exceptionally detailed, part-mystery meat tax agenda—promising that none of his tax cuts would add to the deficit, that the middle class would see a tax break, and that upper-income households would see no tax break. Yesterday, I explained at length why these pledges, coupled with his specific tax cutting plans that cannot be written off, are mathematically impossible. Romney’s tax plan didn’t add up before Wednesday night, and it’s now further into the realm of fantasy. But the Washington Post’s Robert Samuelson didn’t get the memo; instead he’s drinking Romney’s tax cut Kool-Aid.
Essentially, Samuelson is giving greater weight to vague promises—promises that don’t add up, mind you—than to the very detailed plan Romney has laid out for cutting individual and corporate income taxes and eliminating the individual and corporate Alternative Minimum Taxes, estate tax, and Affordable Care Act taxes, among other tax cuts. In doing so, he unjustifiably criticizes President Obama for going after the price tag of the concrete, actually-scoreable proposals that Romney has laid out:
“To justify its $5 trillion figure — the estimated tax loss over a decade — the Obama campaign had to cherry-pick Romney’s proposal and the TPC analysis. It had to ignore any revenue raised by reducing tax breaks and assume that, faced with a conflict between the rich and the middle class, Romney would automatically side with the rich — as opposed to shielding the middle class from any tax increase. On Wednesday, Romney promised to protect the middle class.”
What we know about the Romney tax agenda is that the parts that are specific, concrete proposals cut roughly $6.1 trillion in taxes over the next decade. What do we know about this “revenue raised by reducing tax breaks” that Samuelson refers to? Not much, except that any attempt to raise enough money through loophole closing to pay for the specified tax cuts in Romney’s plan would violate Romney’s promises about the effect of his plan.
How can we be so sure of this? Mostly because the only specific base-broadening that Romney has truly addressed is the expensive and regressive preferential tax treatment of capital gains, dividends, and savings. And Romney addressed it by insisting that it will not be eliminated.
Taking this loophole out of play means it’s impossible to pay for the rest of his plan by closing loopholes without substantially dinging middle-class households. Even if Romney eliminated all $165 billion in (non-firewalled investment income) tax preferences for households making more than $200,000 in 2015, this wouldn’t make up for the $251 billion in tax cuts from his specific proposals, according to TPC. This isn’t a misrepresentation or “cherry picking” of a TPC report, it’s arithmetic: There isn’t enough money to be clawed back by reducing loopholes for the rich (once you rule out the capital income preferences) to pay for his plan, period.
Sure, Romney has also proposed not to raise taxes on the middle class, but why any one promise is given particular weight by Samuelson is beyond me when, collectively, they don’t add up. And if this middle class promise won’t be relaxed, as Samuelson seems to think, the fact that upper-income households would receive a tax cut (again, based on concrete cuts and 100 percent of allowed offsets) necessitates that the revenue-neutrality constraint gets blown out the window. Without detailed offsets from the Romney campaign, exposing the possible downside risks to the fiscal outlook is more than just legitimate—it’s absolutely necessary.
Samuelson then bizarrely pivots to falsely equating Romney’s tax plan—including its mystery meat and big downside risks to fiscal sustainability—with the president’s budget requests:
“The media are rightly hounding Romney about how he’d offset revenue losses from his proposed cuts in tax rates. But the hounding ought to be evenhanded. Obama needs to be pressed on the many inconsistencies of his promises and policies.”
The “pox on both houses” approach to the political aisle is all too popular with Beltway pundits, occasionally deservedly so, but in this case it’s nothing but inaccurate obfuscation. President Obama has proposed four budget requests for the federal government—complete with detailed, line-by-line summary tables of policy proposals and how they add up—all of which have been independently scored by the Congressional Budget Office and Joint Committee on Taxation. (Respectively available here, here, and here for the most recent fiscal 2013 budget request.) This is not smoke and mirrors—these are concrete, scoreable proposals; there is no mystery meat lurking in Obama’s budget.
The difference between the specific proposals put forward by Obama and Romney equates to a huge 4.6 percent of total GDP in fiscal 2016—exceeding the entire current policy budget deficit projected for that year. Yet we’re supposed to condemn both equally?
Again, Romney’s specific proposals would reduce revenue by $6.1 trillion. The fact that he says “trust me, I’ll pay for it without hurting the middle class,” but refuses to say how,should not be tallied as points in his plan’s favor. When exactly did Samuelson get so naïve about taking seriously the word of politicians claiming to care about large deficits while giving away trillions of dollars?