Romney on Taxes

I believe I've mentioned before that I voted for Mitt Romney in 2002, and I retain a respect for the Mitt Romney who existed back then and even governed Massachusetts for a while before he got the idea of running for president into his head. But the new far-right Romney's the one who released this tax blueprint on Thursday. It has seven planks:

• Make Bush's tax cuts permanent, a measure that mostly helps the rich.
• Further reduce income tax rates across the board, a measure that mostly helps the rich.
• "Any taxpayer with Adjusted Gross Income of under $200,000 would pay a tax rate of absolutely 0% on all of the income they earn from their savings, capital gains and dividends." Here's a change -- a proposal targeted at the unique needs of the upper middle class! It's not clear to me what's supposed to happen here if you go from earning $199,877 one year to earning $200,182 the next year: A giant tax hike?
• Permanent elimination of the estate tax, deviating from the theme of measures that mostly help the rich by coming up with something that exclusively helps the rich.
• Corporate tax rate cuts. Guess who this helps?
• No increase in FICA. Since the only form of FICA increase that has any political support involves raising the FICA cap this, in practice, is yet another pro-rich-people measure.
• "Governor Romney supports the full deductibility of qualified medical expenses," which, again, primarily benefits the rich.

Basically, it's like Bush's policies but more so.

Comments

Hmm, maybe Romney read that HuffPo article the other day about how the GOP is losing its business base...

Not sure if this pandering to rich people by basically offering them money will work, though. Rich people like to "earn" their money just like working-class people, and Republican economic policies are bad for business. Romney and other Republicans are basically offering rich folks a bigger slice of a smaller (future) pie.

Posted by Mr. Noah | October 6, 2007 10:44 PM

The interesting question is: whose votes is Romney fishing for? There are not enough rich people to make a majority. To win on a platform of tax "relief" for the rich, Romney needs votes from lots of not-rich people. Are there really that many economically stupid voters out there?

-- TP

Posted by Tony P. | October 6, 2007 11:10 PM

". . .a tax rate of absolutely 0% on all of the income they earn from their savings, capital gains and dividends. " Did I miss some new development, where the GOP base became actively hostile to making money by wages? I guess the underlying dream behind this plan is that once you've amassed your pile, it can never, ever, ever be taken away from you. So what the GOP is offering is the assurance is that once you hit the jackpot, you and your family will never have to work again.

Posted by roublen | October 6, 2007 11:58 PM

Wow! This'd be great!!

I wouldn't have to pay taxes ever again, practically.

Sucks for my kids, tho.

Ah well, screw 'em

Posted by John Casey | October 7, 2007 12:02 AM

In short, the only transaction that a person makes that results in income which is taxed, is labor for money. Every other legal way of having income is untaxed. A variation on the theme that taxation is theft.

Unspoken corollary: low taxes and low services. The Dixie system of governance.

Posted by JohnMcC | October 7, 2007 12:05 AM

Basically, it's like Bush's policies but more so.

In other words, he's also pulling a Double Guantanamo on tax policy.

Posted by anon | October 7, 2007 12:10 AM

"Every other legal way of having income is untaxed." well, if you're a small-business proprietor, and you make an investment in your business that increases your income, my guess is that you don't get the tax break. To get the tax break you'd have to invest outside your business in real estate or some publicly traded corporation somewhere. So small business is left out too, I think (but I could be wrong).

Posted by roublen | October 7, 2007 12:18 AM

"Any taxpayer with Adjusted Gross Income of under $200,000 would pay a tax rate of absolutely 0% on all of the income they earn from their savings, capital gains and dividends." Here's a change -- a proposal targeted at the unique needs of the upper middle class! It's not clear to me what's supposed to happen here if you go from earning $199,877 one year to earning $200,182 the next year: A giant tax hike?
**********************

Precisely. A huge, grotesque tax hike that obviously punishes middle class investors for investing wisely! Something that cannot be tolerated, and won't be, so the minute the bill passes Pres. Romney can start campaigning to raise the exemption to $300,000, and so on.

Remind me at what income level a family of four should be ineligible for health care assistance according to these very scary clowns?

Posted by aleks | October 7, 2007 12:30 AM

Remind me at what income level a family of four should be ineligible for health care assistance according to these very scary clowns?

That reminds me of something I thought about. If Democrats had applied SCHIP to that much talked about 4 children family earning $83,000 but made it a tax deduction instead, conservatives would have no arguments against it because they love tax deductions. But because it was a direct payment, they're against it.

Posted by Dan the Man | October 7, 2007 12:51 AM

It's not clear to me what's supposed to happen here if you go from earning $199,877 one year to earning $200,182 the next year: A giant tax hike?

Well right now if you make less than 31,850 your capital gains tax rate is 5%, but it jumps to 15% at a dollar more so you already see some of that. Surely there would be ways to minimize the distortive effects in practice.

Posted by right | October 7, 2007 1:47 AM

as George Will insists from time to time, Americans are "aspirational." That's the political logic, if there is one, that has to underlie something like this. Romney's people think that the majority of Americans not currently standing to benefit from this will nevertheless agree with it, believing their own ascent into the $100k+ realm to be imminent.

That, or he thinks we're just not paying attention. Abortion! Gays! War War War!

I'd say the latter is equally likely, but he's gonna have a tough time selling those distractions.

Posted by night owl | October 7, 2007 2:38 AM

So in other words, Romney is giving himself a tax cut?

Just like Bush/Cheney did?

I know it may seem like an impolite and perhaps uncouth thing to point out, but it's true isn't it?

Posted by cvcobb01 | October 7, 2007 4:32 AM

Sorry - _before_ he ever wanted to be President? When exactly do you date this? Are we to believe that this occurred to him sometime during his governorship?
As Mr. Noah notes, Romeny has always been a panderer.

Posted by berger | October 7, 2007 4:41 AM

Did I miss some new development, where the GOP base became actively hostile to making money by wages?

Yeah. For quite a quite a while, the conservative movement has believed that a hard days work making an honest wage is a sucker's game, and should be punished as compared to other ways of making money.

Posted by Karmakin | October 7, 2007 7:40 AM

I read somewhere recently that BushCo have raised the national debt from about $5.7 trillion to about $8.9 trillion, the excuse presumably being 19 guys with boxcutters. Romney proposes more of the same?

Posted by bob h | October 7, 2007 7:48 AM

The interesting question is: whose votes is Romney fishing for? As it often is in american politics, the answer is Old People. They are the ones who don't like taxes on savings and capital gains.

Posted by Boring Commenter | October 7, 2007 8:07 AM

"Any taxpayer with Adjusted Gross Income of under $200,000 would pay a tax rate of absolutely 0% on all of the income they earn from their savings, capital gains and dividends."

Hey, that's me! I think that would save me at least $10 on my next tax return.

Basically, it's like Bush's policies but more so.

Let's add a Cheney plank: Income for newly enlisted military personnel is entirely tax-free. Gotta give the hoi polloi some choices, after all.

Posted by RSA | October 7, 2007 8:32 AM

"before he got the idea of running for president into his head"???????

Matt, I had no idea you were that old.

Posted by pfc | October 7, 2007 9:48 AM

The best part about this plan is its total disregard for deficits and debt. Underpinning it all is a devout faith that cutting taxes is appropriate in all situations (even wartime) and that cutting taxes on the wealthy will help everyone in the end. I'd recommend that someone tabulate the effects of this plan on the debt, but that would be pointless. Conronted with uncomfortable facts, Romney (and/or Norquist) will just present an alternative scenario based on dishonest statistical manipulations, and the press will report the conflict as an honest debate between equally compelling visions.

Tax policy has become a study in wishful, ideological thinking. I fear that having a sensible public debate about the issue is impossible. The Reagan and Bush years have convinced me of that.

Posted by Unreal Veal | October 7, 2007 10:24 AM

Real men go for flat tax or for national sales tax. I think that Romney wants to be a moderate during primaries.

And, of course, Romney will end the war and slash the defence spendings to balance his revenue cuts.

War and healthcare should prevent these snake oil salesmen from selling their schtick. Except that with healthcare, wingnuts keep making the innumerate proposals which are not as obviously screwing up everybody as their social security plans, so Democrats have some work to do.

I just have seen an article by Stoessel bemoaning the fact that people do not flock to medical plans with higherst possible deductibles. He gave an example that by raising your deductible to 2100 you can save 1300.

On the first glance this is absurd -- you save 1300 by paying 2100 more. On the second glance, it looks a bit better because the initial deductible was presumable more than zero, and in most years you do not spend it. But here is a rub: medical expenses are somewhat predictable, and once most people start doing those predictions and choose deductibles, the premium for low dedictibles will start to skyrocket. The outcome will be that you have a system that works well when you do not need it, and which does not work at all when you do.

It makes one wonder: why people are buying all those expensive cars that can drive uphill if cars that can drive only on flat roads or down could be produced for fraction of the cost?

The problem is that it is a bit complicated argument, so politically it can be parsed using well selected horror stories.

Posted by piotr | October 7, 2007 10:29 AM

"Any taxpayer with Adjusted Gross Income of under $200,000 would pay a tax rate of absolutely 0% on all of the income they earn from their savings, capital gains and dividends."

So that would effectively turn all IRAs from tax derfered into no-tax. That would be a hell of a draw, and one hell of a hit to the coffers.

Posted by daveNYC | October 7, 2007 11:15 AM

"I believe I've mentioned before that I voted for Mitt Romney in 2002, and I retain a respect for the Mitt Romney who existed back then"

Matthew Yglesias: the most gullible motherfucker on the planet.

Posted by The Fool | October 7, 2007 12:48 PM

Mr Roublen-you are preceptive and I was lax. I bet small-business owners would not be treated on a par with the large-invester class.

Mr Piotr-the CPC (conservatively politically correct) term is no longer 'flat tax'. They call it 'fair tax' now-a-days. They're so good at that; remember BlueSky Initiative or HealthyForests or Iraqi Freedom?

Posted by JohnMcC | October 7, 2007 1:15 PM

Matthew Yglesias: the most gullible motherfucker on the planet.

That is a bit harsh. But as someone from Massachusetts, I can sympathize with it. When did Multiple Choice Mitt ever try to govern? The only thing I can think of that he has going for him is that unlike Rudy he isn't a mad fascist.

Posted by Doug T | October 7, 2007 1:35 PM

JohnMcC: I am behind the curve. I though that "national sales tax" is "fair tax", so rather than having a flat tax, it would tax proportionally more folks who make too little to save much. Flat tax is actually giving more room for zero bracket and some such, so it is insufficiently neandertal to call it "fair". I thought that Rudi was for the flat tax and Thompson for the sales tax (as is Mr. Gravel).

Perhaps this is Romney strategy: once you believe in golden tablets that appear and disappear, you do not have to prove your craziness to GOP base by supporting most outrageous tax schema. I call it Christy Whitman school of Republican moderation: make up for your mild demeanor with utter fiscal irresponsibility,. Unlike Rudi Guliani school of moderation: make up for your mild social views with rabidly vicious demeanor (you, my Evangelical friends, may despise me, but liberals loath me much more!). Unlike Fred Thompson school: explain your non-fanatical past claiming that you can do ANYTHING for a buck -- which, in GOP, should be treated as a noble sentiment.

A question: how did Romney get elected? Was it a year when a total nut won Democratic primary, certain Dr. Silber, authoritarian President of BU?

Posted by piotr | October 7, 2007 1:55 PM

Was it a year when a total nut won Democratic primary, certain Dr. Silber, authoritarian President of BU?

No. It was a woman, Shannon O'Brien, from a well-connected political family. But, IIRC, she lost the suburban woman vote. And Multiple
Choice Mitt ran slick pandering campaign, if you can believe that. He had descended on the state from Utah and drove the incumbent GOP governor, Jane Swift, out of the race and then went from there. BTW, the term multiple choice comes from one of his Massachusetts campaigns when he reaffirmed in no uncertain terms his support for choice. "No multiple choice here."

Posted by Doug T | October 7, 2007 5:50 PM

Doug T:

I'm only harsh because Matthew says he still retains respect for the guy "back then" despite the fact that he has now been revealed as a fraud. He was a fraud then too. It's bad enough that Matthew was unable to figure this out then, its even worse that he apparently still can't figure it out now.

You were much better on the Iraq War, Matthew. You got that one woefully and inexcusably wrong as well, but you have redeemed yourself partially by pulling your head out of your ass when so many other Big Media Types have only lodged theirs in deeper.

Here's a surprisingly accurate heuristic for you Matthew: if a politician identifies with the Republican party, they are bad. This heuristic will work for you 99.99% of the time. This is not a tautology, merely an incredibly well-confirmed empirical fact.

Here's a corollary: if a Republican is pushing a policy idea, it's a bad idea that more than likely ultimately benefits the well off or the fanatically Christian (the latter as a means to helping promote the former).

Matthew, if you adopted this heuristic and its corollary, you would avoid those highly embarassing public displays of foolishness like supporting the Iraq War or still respecting Romney 1.0.

Posted by The Fool | October 7, 2007 6:58 PM

"Any taxpayer with Adjusted Gross Income of under $200,000 would pay a tax rate of absolutely 0% on all of the income they earn from their savings, capital gains and dividends." Here's a change -- a proposal targeted at the unique needs of the upper middle class!

it's more of a proposal targeted at the unique needs of the lower upper class. remember that $150k is the 95th percentile of household income. people in that range tend to think of themselves as middle class even though their parents paid for them to go to expensive private high schools in manhattan in and even more expensive private colleges in the boston area (any idea who this might describe?). but they're not plausibly in the middle of anything.

Posted by a commenter | October 7, 2007 7:30 PM

Combine this with a balanced budget amendment and you either end up with no Defense Department or no Social Security and Medicare/Medicaid. Guess which Romney will choose.

Posted by Easter Lemming | October 7, 2007 7:54 PM

Mr piotr--you are correct, sir. I was inexcusably shooting from the hip and, dammit, I really did know that the "fair tax" is a nat'l sales tax. I had spent hours grumbling and muttering under my breath about that particular misnomer just a couple of days ago. Maybe the drugs are catching up to me after all these years now that I'm old. Embarrassed .

Posted by JohnMcC | October 7, 2007 8:46 PM

The zero tax on savings may be a bad idea, but it's definitely for a lot more people than the rich. My AGI is usually below 25,000, and it would save me at least $300 a year--well over 10 percent of my total income tax. It would, of couse, completely gut any kind of IRA. A reasonable version would be a much lower ceiling (say, AGI of 40k) phased up to full tax at, perhaps, AGI of 100k.

Posted by kishnevi | October 7, 2007 10:36 PM

Any taxpayer with Adjusted Gross Income of under $200,000 would pay a tax rate of absolutely 0% on all of the income they earn from their savings, capital gains and dividends.

It seems like a lot of you are misreading that item. If, like most of us, you make your money by working you get zilch.

If any of you are making most of your money through capital gains, savings or dividends, you should thank your grandparents for leaving you with lots of disposable income and quit whining about your tax rates.

Posted by Jinchi | October 8, 2007 12:26 AM