Republicans never tire of telling us that the economic problems we have can mostly be fixed if we just let rich folks keep more of their money. Cut their taxes and these apparently fair-weather patriots will invest their excess dough in America and, voilà, all boats will rise in the resulting swell of economic goodness. Blah, blah, blah. We’ve heard it a gazillion times, including from the lips of Mitt Romney.
Given that, I found Romney’s recent exchange with Scott Pelley of 60 Minutes (the Romney interview wasn’t Pelley’s finest hour of journalism, to be sure) interesting, when Pelley asked him about taxes:
PELLEY: What would the individual federal income tax rates be?
ROMNEY: Well, they would be the current rates less twenty percent. So the top rate, for instance, would go from thirty-five to twenty-eight. Middle rates would come down by twenty percent as well. All the rates come down. But unless people think there’s going to be a huge reduction in the taxes they owe, that’s really not the case because we’re also going to limit deductions and exemptions, particularly for people at the high end. Because I want to keep the current progressivity in the code. There should be no tax reduction for high income people. What I would like to do is to get a tax reduction for middle-income families by eliminating the tax for middle-income families on interest, dividends, and capital gains.
PELLEY: The tax rate for everyone in your plan would go down.
ROMNEY: That’s right.
PELLEY: But because you’re going to limit exemptions and deductions, everybody’s going to essentially be paying the same taxes.
ROMNEY: That’s right. Middle-income people will probably see a little break, because there’ll be no tax on their savings.
PELLEY: And corporate tax rates?
ROMNEY: Corporate tax rates, also, I’d bring down and with the same idea let’s get rid of some of the loopholes, deductions, special deals, such that we’re able to pay for the reduction. I don’t want a reduction in revenue coming into the government.
Let’s forget for a moment about Romney’s vagueness on just which loopholes he will close. When compared with the philosophical presumption of conservatives, that giving wealthy people more money incentivizes them to create jobs, Romney’s comments are incoherent:
I want to keep the current progressivity in the code. There should be no tax reduction for high income people.
Corporate tax rates, also…I don’t want a reduction in revenue coming into the government.
One is compelled to ask: If high-income people don’t get a tax reduction, then how does Romney’s voodoo magic work? If corporations will still be forking over the same amount of revenue, how will that inspire them to salute the flag and spew forth their hoarded cash? Huh?
It would be one thing to argue (albeit falsely, as the CBO just figured out) that giving rich folks and corporations big fat tax breaks would make the economy grow—the old Reagan, supply-side voodoo—but it’s quite another to argue that simply rearranging the tax rules but still collecting the same amount of revenue will cause the economy to grow.
That brand of voodoo is distinctly Romney’s, as far as I can tell. It makes no sense to me. Heck, it makes much less sense than the old voodoo. So, let’s call Romney’s economic thinking “doodoo economics,” the idea that you can get rid of unspecified loopholes, lower rates, and still have the same amount of revenue coming in, which will both create economic growth and not increase the deficit. Pee-yew!
But the truth is, as almost always with Romney, he is lying. For one thing, he said he wants to “keep the current progressivity in the code.” Except that less than a week ago he said the following, which earned him a Pants on Fire!:
I know there are some who believe that if you simply take from some and give to others then we’ll all be better off. It’s known as redistribution. It’s never been a characteristic of America.
Obviously, a progressive tax code is redistributive. So, Romney himself believes in redistribution, if what he told Scott Pelley about keeping the tax code progressive is true. But then he says it’s not American. Between the two, what he said last week versus this week (always a choice with Mittens), which does Romney really believe? My money is on what he said last week, as it better reflects the feelings of Rush Limbaugh, Sean Hannity, Ann Coulter, and Glenn Beck, who, when it comes down to it, run the Republican Party.
The main lie, though, the one that could have practical effects should Romney win, was advanced when Romney told Scott Pelley that his tax plan, at least as he has tried to sell it, would be revenue neutral. This particular lie is being funded by millions of dollars of Rovian money, via Crossroads GPS. Apparently, Republicans believe money can triumph over math.
But even one of the most respected conservative economists in the country, Martin Feldstein, who tried like hell to make Romney’s doodoo economics add up and smell good, could only essentially confirm what other, less conservative, economists have discovered. Feldstein’s study, as TPM pointed out, found,
that there isn’t enough money in tax loopholes for people in top tax brackets to offset the trillions of dollars Romney’s promised rate cuts would cost. Perks that benefit middle income earners like the mortgage interest deduction, and deductability of employer-based health insurance, charitable giving and state and local taxes would need to be limited or eliminated.
As Bill Clinton told us at the Democratic convention, past Republican economic policies have “defied arithmetic” and have led to much deficit spending. He argued,
We simply cannot afford to give the reins of government to someone who will double-down on trickle-down.
And in Romney’s case, his version of trickle-down is even weirder and more arithmetically challenged than ever.