Tax Policy Center

Mitt Romney: Magic Man

Leo Gerard — Tue, 09 Oct 2012 09:28:38 -0400

"I’m gonna float like a butterfly and sting like a bee;
George can’t hit what his hands can’t see;
Now you see me, now you don’t;
He thinks he will, but I know he won’t." ~ Muhammad Ali

At last week’s presidential debate, Mitt Romney floated like a butterfly and stung like a bee.

He punched and parried, feigning the great Muhammad Ali.

Any likeness between the two is, however, mere illusion. America has seen victory by Muhammad Ali. America worked through disputes with Muhammad Ali. Now America admires Muhammad Ali. And Mitt Romney is no champion. Instead, Romney's a magic man. He employs sleight of hand. He uses smoke and mirrors to confuse and obscure. Unlike President Obama, Mitt doesn't do math. He performs tricks, sorta like Muhammad Ali said in his rhyme – Now you see severely conservative Romney, now you don’t. The GOP nominee asks Americans to engage in magical thinking – to believe his hocus-pocus is not just a stage show but will actually painlessly solve problems.

Last week, Romney promoted his magic show during the debate. He promised his performance as president would be fabulous, stupendous, unprecedented! He bragged:

“My plan is not like anything that’s been tried before.”

Specifically, he was talking about his tax plan. Romney has pledged to reinstate the Bush tax cuts should they expire at year’s end as scheduled, then further slash income taxes by 20 percent for everyone. Also, Romney has vowed to eliminate and cut other federal taxes, including the estate tax.

Here’s the part where Romney promises to accomplish something never done before: he says he’ll slash and burn all these taxes but not add a dime to the deficit or to the tax burden of the middle class. When Ronald Reagan made a similar promise, George Bush I called it voodoo economics. George Bush II tried this magic trick and failed. Bush gave everyone, particularly the rich, tax breaks. Then the federal deficit skyrocketed. To quote a bumbling former Republican presidential candidate, “Whoops.”

Romney says that won’t happen when he performs as president. He’s too good. The illusionist swore to the nation Wednesday night:

“My, my number one principal is, there will be no tax cut that adds to the deficit. I want to underline that: no tax cut that adds to the deficit.”

He hasn’t specified how he’d accomplish that because, as you know, magic tricks are proprietary secrets. He’s offered a couple of enticing tidbits, however.

One is that he’d close tax loopholes and deductions to recoup income lost because of all those tax cuts. But he won’t say which ones because, again, those proprietary magic secrets.

The nonpartisan Tax Policy Center (TPC) analyzed Romney’s proposal and concluded it didn’t add up – even when they gave him lots of breaks because his plan is clandestine. To get back $1 from closed loopholes for every $1 in tax cuts, the TPC determined that Romney would have to eliminate breaks favored by the middle class, such the mortgage deduction. And that means Romney’s plan would cost middle class families an additional $2,000 a year on average, the TPC said.

Still, Romney assured the American people last week:

“I will not, under any circumstances, raise taxes on middle-income families. I will lower taxes on middle-income families.”

Abracadabra!

Romney insists his bag of tricks contains one that will enable him to defy the math of the TPC economists, who served in both Republican and Democratic administrations. One way would be to do what Bush did, just cut taxes and increase the deficit. Romney contends that’s not in his repertoire:

“I won't put in place a tax cut that adds to the deficit. That's part one. So there's no economist can say Mitt Romney's tax plan adds $5 trillion if I say I will not add to the deficit with my tax plan.”

Nobody can say it if Mitt Romney says they can’t! He dismisses pesky economic experts with a wave of his magic wand.

Just as he’d heal the budget, Romney would patch up the nation’s health care system -- with pixie dust.

First, he says he’d repeal Obamacare on day one. Second, he told debate listeners:

“What I support is no change for current retirees or near-retirees to Medicare.”

Logically, or mathematically, or realistically, that won’t work. As of August, 5.4 million seniors had saved $4.1 billion on prescription drugs, about $768 each, because Obamacare closes the Medicare prescription plan donut hole. And, under Obamacare, this year more than 18 million Medicare recipients received at least one preventive service for free. Killing Obamacare would mean seniors would have to pay those costs once again from their own limited funds. This would be a costly change to Medicare for current retirees and near-retirees.

Also, Obamacare extended the life of Medicare by eight years. It did so by reducing payments to medical facilities by $716 billion over a decade, reductions accepted by the providers when the law was negotiated. Romney says he will eliminate the savings to Medicare and give those payments to the medical facilities. That, logically, would snuff out the life of Medicare eight years earlier, which would be a tragic change to Medicare for current retirees and near-retirees.

But, you know, presto-chango, Romney says it ain’t so.

Many aspects of Obamacare are beloved by those who have benefitted, including extending coverage for young adults on their parents’ plans, eliminating coverage caps and instituting rebates when insurers charge too much. But perhaps the most important Obamacare protection was the specification that insurers can’t deny coverage to people with pre-existing conditions.
Repealing Obamacare would eliminate that benefit. Romney’s response at the debate:

“In fact, I do have a plan that deals with people with pre-existing conditions.”

Romney’s plan could exclude millions, however, since it guarantees insurance only if the person with a pre-existing condition has maintained coverage without a lapse longer than three months.

But, no worries. In Romney’s magical world, if we all just clap loudly enough, Tinker Bell won’t die!

Like any good magician, Romney keeps the details of his plans for America hidden up his sleeve. Taking a cue from that Muhammad Ali rhyme, he believes:

Your hands can't hit what your eyes can't see.

Romney, Ryan Don’t Get the Average Joe

Leo Gerard — Tue, 21 Aug 2012 09:39:18 -0400

GOP presidential nominee Mitt Romney foolishly revived the dust up about his income tax secrecy last week. He claimed he paid at least 13 percent, an assertion easy enough for him to prove by releasing his tax documents.

But he’s refusing to do that. He called the concern about his tax rate “small minded.” Much more important issues overshadow it, he contended.

Maybe so. But the American people, the Average Jane and Joe, do care whether Romney used tricks and loopholes and offshore accounts to manipulate the tax system and pay nothing. And they’re not “small minded,” as Romney accused them of being, for wanting to know.

For them, a quarter billionaire who paid nothing or paid a rate lower than the middle class lacks the principles they like in a president. The vast majority of voters aren’t going to dissect the budget proposed by Romney’s running mate Rep. Paul Ryan, but they will vote based on the values it reveals. Romney’s ability to rattle off technical details won’t decide the election. Morality, or Jane and Joe’s perception that Ryan and Romney’s policies lack it, will.

Other millionaires have led the nation. In fact, the majority of those in the past presidents club were millionaires. But some of the nation’s wealthy presidents had spent time with America’s Average Janes and Joes and understood their dreams and struggles and were sympathetic to them.

Though raised on an estate, Franklin Delano Roosevelt knew suffering firsthand after being cut down by polio as a young man. He spent long periods with working men and women in Southern recuperation centers as he tried in vain to get his legs to work again. Immediately on his election to the presidency, he launched programs to aid the impoverished.

By contrast, Romney and Ryan, both raised in privilege, have demonstrated remarkable insensitivity to everyday Americans.

Romney, scion of a Detroit car company executive, said as GM and Chrysler struggled in the midst of the Great Recession, “Let Detroit Go Bankrupt.” He’d have countenanced an uncontrolled bankruptcy for the two corporations, costing tens of thousands of middle-class workers at assembly plants, car dealerships and auto part manufacturers their jobs, their homes and their hopes. He’d have done nothing and let them all suffer. There’s a certain carelessness, a heartlessness to that. Those aren’t values many middle-class workers cherish in a president.

Ryan also grew up without worry about money, in a small town where his family owned a construction business and his father was a lawyer. Because his father died when Ryan was 16, Social Security helped him pay for college. Ryan’s plans, however, imperil Social Security for future generations, for the next decade’s 16 year olds who lose fathers.

Ryan sponsored legislation during the Bush administration to privatize Social Security, allowing the fund to be weakened by the draining of untold billions that would be risked on Wall Street, on the very stock market that crashed during the last year of Bush’s reign, sucking the value out of private pension funds. Many middle-class workers don’t find gambling with their retirement security attractive in a president.

Ryan and Romney are in trouble with America’s Average Janes and Joes over their tax proposals as well. Romney says he wants to cut income taxes by 20 percent for everyone, which he claims he would pay for by ending tax deductions. He has declined to specify which ones, however. Here’s what the nonpartisan Tax Policy Center said about his plan: it would cost the wealthy like Ryan and Romney less and the Average Jane and Joe more.

That’s right. Specifically, the plan would reduce taxes each year for the nation’s wealthiest 5 percent, ranging from a cut of $1,800 for the least rich to nearly $250,000 for the most rich. For the other 95 percent of taxpayers, the nation’s middle class, Romney’s “tax cut” would mean a tax increase averaging $500 per household because, the Tax Policy Center said, tax breaks that the middle class depends on, like the one for mortgages, would disappear. The center said it was a fantasy for Romney to suggest he could fund his plan by eliminating only tax breaks for the rich.

The Average Jane and Joe may not read the entire report. But they do understand this one key fact: The Romney tax plan will cost them more and Romney less. Many will find the injustice of that to be unattractive in a president.

Similarly, Ryan’s budget “Roadmap” would also lower Romney’s tax rate. Ryan would require him to pay less than 1 percent. That’s because the vast majority of Romney's $21 million income in 2010 came from capital gains, interest and dividends, and Ryan would eliminate all taxes on capital gains, interest and dividends.

Most middle-class household income, all of $50,000 a year and declining, comes from wages, not capital gains, interest and dividends. So those families would be paying rates way higher than 1 percent. In fact, the Tax Policy Center determined that Ryan’s budget would raise taxes on the bottom 30 percent of wage earners.

The Average Jane and Joe may not memorize all those facts and figures. But they will recall that Ryan wants quarter billionaires to pay 1 percent and them to pay way more. That’s just galling. Far from what the middle class finds to be a desirable trait in a vice president.

When a reporter asked Romney about his tax rates last week, the Republican candidate had just finished lecturing the ensemble on the intricacies of his Medicare plan using a white board.

What Romney can’t comprehend is that for the middle class, it’s not the numbers.

What the Average Jane and Joe will recall is that Romney and Ryan plan to privatize Medicare, to destroy a beloved program on which the middle class depends. What they’ll know about Romney and Ryan is that their proposed policies show they don’t have a clue what it’s like to struggle. And don’t care. Carelessness is not a quality the middle class finds desirable in the occupants of the Oval Office.