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In discussing Mitt Romney’s decision to offer some new tax cut proposals yesterday, I wondered whether Mitt would have the guts or deficit-hawk mojo to offer offsets by way of specific proposals to end tax expenditures, or would instead rely on supply-side pixie dust to make it all magically work out in the end.
It appears Romney is not explicitly opting for pixie dust, but nor is he going to get pinned down on any specific offsets. He is calling for “revenue neutrality” and insisting he won’t shift the tax burden down the income ladder—but he won’t tell us exactly what he’d do to to redeem either of those pledges.
Here’s how John Harwood describes Romney’s political calculation:
Mr. Romney’s plan aims to balance two competing priorities of different Republican factions. By proposing to cut the top rate, he is seeking support among supply-side conservatives who contend that lower marginal rates are the key ingredient for producing economic growth.
But by vowing to offset the loss of revenue by eliminating some deductions, he is addressing concerns among deficit hawks about expanding the tide of red ink that has the federal government spending an estimated $1.3 trillion more than it takes in this year.
And by insisting that those unspecified reductions will fall most heavily on the affluent, he is seeking to limit a line of attack that portrays him as a wealthy former financial industry executive who himself has paid taxes at only around the 15 percent rate because most of his income comes from capital gains. Mr. Romney would maintain the current 15 percent rate on dividends and capital gains.
Yeah, that all makes sense, particularly from the point of view of a candidate who seems to view public policy as a series of political obstacles to negotiate rather than as a reflection of any particular convictions. But by failing to identify specific offsets, other than hinting that maybe the mortgage interest or charitable deductions might be limited for the very wealthy, Romney is in effect offering the dessert of tax cuts up front, with the less palatable solid nutrition that makes the plan work to be identified manana.
Is this approach ultimately any more honest than supply-side pixie dust? Hard to say, but it’s worth noting that Mitt Romney is not exactly a guy whose promises on any subject can be taken to the bank.
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j on February 22, 2012 3:34 PM:
As the republicans insist Obama pays for everything, I wonder how the candidates who all want to go to war with Iran and also go into Syria plan on paying for it -perhaps they will just cancel social security to make sure the poor pay.
Josef K on February 22, 2012 3:38 PM:
Can we just come out and say nothing Romney says is trustworthy or accurate?
Mitch on February 22, 2012 3:55 PM:
@j
Only Democrats have to pay for anything. When the GOP is in charge "deficits don't matter." As Darth Cheney said, Reagan proved it.
You gonna argue with Cheney? He might take you duck hunting.
-and-
@Josef K
Can we just come out and say nothing *Republicans* says is trustworthy or accurate?
-fixed that for you for better clarification. Mitt's just a symptom of the greater disease.
Mitt's Magic Underwear on February 22, 2012 4:07 PM:
Obama should just say he's getting rid of all taxes, and it will be revenue neutral!
zattarra on February 22, 2012 4:28 PM:
The analysis I've seen of the plan so far say it will cost $10 trillion over 10 years and the only pay for's involve cutting social security and turning medicare into vouchercare. And even then it is a deficit producing budget buster as it moves revenues down to about 15% of GDP while giving the rich massive tax breaks. So yes, it's a Republican tax plan.
Sgt. Gym Bunny on February 22, 2012 4:37 PM:
Yeah, that all makes sense, particularly from the point of view of a candidate who seems to view public policy as a series of political obstacles to negotiate rather than as a reflection of any particular convictions.
You would have to think the people who work on his campaign are getting sick and tired of writing and re-writing his material. I bet Romney Headquarters is just drowning in balled up pieces of paper...
pjcamp on February 22, 2012 9:31 PM:
This is what you get when you propose to run the country like a bidness. The bidnessman determines what the market wants and then gives it to them.
skeptonomist on February 23, 2012 10:16 AM:
It is certainly true that Romney - and many other politicians - view public-policy statements as obstacles to be overcome. Some more astute politicians view them as opportunities to gull the electorate. This seems to be how Obama viewed his pre-elections statements on several matters, for example bringing banking and Wall Street under control and intelligence and surveillance matters. How should we view the current policy line of the Obama administration toward increasing taxes on corporations and the rich? If Obama is reelected will he follow through on making the tax structure more progressive? His proposal for revising corporate taxes does not seem to be a serious effort to increase revenue, rather it looks like a public-relations ploy.