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During the election campaign, Mr. Romney said he had a plan to lower income tax rates by 20% across the board and pay for those deep tax cuts by closing tax deduction loopholes in the IRS code, aka, 'broadening the base.' To me, Romney's plan was kind of silly because lowering tax rates reduces revenue and closing tax loopholes raises revenue.....with a net gain to everyone involved being zero.
The problem with Mr. Romney's plan, as the tax Policy Center pointed out at the time, was that even if all current loopholes were closed on the top 2% that still would not raise enough revenue to offset the revenue lost due to lowering income tax rates by 20%.
Many Democrats, including former President Clinton, correctly told voters that Mr. Romney's plan just "didn't add up" unless Mr. Romney took tax deductions away from middle income earners, in effect, raising taxes on those not in the top 2%. The phoniness of Mr. Romney's tax cut proposal eventually compelled Mr. Romney to shake his Etch-a-Sketch and say....'never mind.'
The election is over. Mr. Romney lost. But Mr. Romney's income tax cut plans....like zombies....live on.
(Republican Senator Saxby) Chambliss told the Atlanta Journal Constitution that federal revenues can be increased significantly without raising tax rates, by limiting deductions. But he noted the popularity of the most important deductions, which are granted for mortgage interest, charity gifts and health care costs.
"It can be done, but it's going to require the elimination of almost all_ if not all – tax deductions and tax credits," Chambliss said. "That's going to be difficult."
Mitt Romney was convinced to drop his tax cut plan because it simply didn't add up. Now, however, Chambliss and the Republicans are saying..."it can be done."
Here is the House Speaker, after the election, resuscitating Mr. Romney's campaign tax cut....
The tax code includes "all kinds of deductions, some of which make sense, others don't," House Speaker John Boehner, R-Ohio, said last week. "By lowering rates and cleaning up the tax code, we know that we're going to get more economic growth."
Astonishingly, or not....Boehner is simply saying that, 'no, Mr. Romney's tax cutting plan actually does add up.'
Then for good measure, Mr. Boehner resurrects yet another dead zombie lie....
''the problem with raising tax rates on the wealthiest Americans is that more than half of them are small-business owners''. He added that ''raising tax rates will slow down our ability to create the jobs that everyone says they want''.
The facts are that less than 3% of all small business owners earn over $250,000 a year.....and that consumer demand determines hiring, not tax rates on the richest 3%.
It appears as if Republicans will not permit a tax rate increase.....of any kind. However, what they will allow is tax loophole closings to raise revenue.
Former Obama administration economic adviser Jared Bernstein said that Republicans can sense weakness from the White House on this very policy point...
It is big–HUGE–for conservatives that the President has not mentioned higher rates since Tuesday, including in his comments yesterday. His spokesperson did say that he’d veto a bill that fully extended all the cuts, but the White House has been careful not to come down on one side or the other of the rates/base question. His opposition is quite emboldened by this.
The rich-loving-and-serving Wall Street Journal also noted Obama's wobbliness on sticking to his tax rate increases on the top 2%....
"I'm not wedded to every detail of my plan. I'm open to compromise," he added. "But I refuse to accept any approach that isn't balanced.…And on Tuesday night, we found out that the majority of Americans agree with my approach."
Mr. Obama also signaled that a deal would include changes to entitlement programs such as Medicare and Medicaid, but he didn't mention Social Security
The president didn't specifically mention raising tax rates on households earning more than $250,000 a year, as he did throughout his re-election campaign. Mr. Obama's remarks came after Mr. Boehner said Friday he is open to a deal that raises tax revenue but not rates, leaving open the possibility for a compromise that includes limiting or eliminating tax deductions or other tax breaks for those families.
Summary: The country re-elects a Democratic president who campaigned on returning tax rates on our nation's wealthiest citizens back to Clinton era rates. Obama wins re-election and yet immediately states he is "open to compromise" when it comes to.....tax rate increases on the wealthy. Also, too....cutting Medicare and Medicaid.
If a deal is reached before the new Congress is convened, I'll be surprised....but if it happens, it will most assuredly be (just like with Obamacare) a deal favoring Republican policies. No tax-rate increases on the top 2%, only tax loophole closings....which means a continuation of the egregious 15% tax rate on multi-millionaires like Mr. Romney.
Is there anyone who believes that a "bipartisan" deal that only closes tax loopholes and doesn't raise rates on our wealthiest, will not, after the smoke clears, negatively affect the middle class? Anyone?
John Boehner doesn't....
"The year 2013 should be the year we begin to solve our country's debt problem through entitlement reform and a new tax code with fewer loopholes and lower rates,'' Mr. Boehner said.
Final question: If Democrats win.....do elections even matter?