Silliness continues to ensue over Romney’s 5 trillion dollar tax cut. Fact checkers, again and again, have shown how Romney’s claims on his redux of the vastly unpopular Bush tax cut are ‘mostly false.’ In one example FackCheck.org, managed by the conservative Annenberg Foundation, noted:
“Romney has failed to produce evidence that what he promises is possible. And we judge that the weight of evidence and expert opinion is clear — it’s not possible.”
However, given the fact that the $5 trillion dollar number is based on some very accessible figures, it shouldn’t be difficult for anyone with a little bit of time to check and confirm that Romney is, indeed, misrepresenting himself.
First, it’s important to note where the $5 trillion number came from. The non-partisan Tax Policy Center showed that Romney’s tax plan would cost about $480 billion dollars per year by 2015. What the Obama administration did was average this number over ten years to get about 5 trillion dollars. This isn’t fuzzy math at all, since budget planning usually looks at ten year periods and decade intervals.
Here’s an overview of the math:
Cost of Romney’s tax cut this year would equal 2.1 trillion in tax revenues x .2 (a 20% tax cut) to get 420 billion dollars in lost revenue this year. Cost of Romney’s tax cut in 2015 would equal the projected revenue of 2.4 trillion x .2 to get 480 billion dollars for that year (the number the Tax Policy Center came up with). And cost of Romney’s tax cut in 2020 would be 2.8 trillion x.2 to get 560 billion dollars. Averaged over ten years, these numbers amount to around 5 trillion. So by the math, Obama’s assertion is correct. Romney creates another 5 trillion hole in the budget even before he can start filling in the deficit hole through his promised ‘cuts.’
And Romney’s 5 trillion tax cut would add to the already large 3.6 trillion dollar (per decade) tax cut enacted by President Bush, which Romney has also pledged to keep.
That’s 4.2 trillion dollars added to the debt, so far, via the Bush tax cut. Add in the 9 trillion hole caused by the Bush recession and another 5 trillion via Bush’s unpaid wars and we get to the current debt figure of about 16 trillion. When combined with republican sabotage of Obama’s $4 trillion deficit reduction proposal, it isn’t an understatement to claim the republican party wholly owns this debt problem, even if the news media has failed to identify this, rather clear, fact. And, now, to top it all off, Romney trots along with another $5 trillion over the next decade and an extension of the Bush tax cut to total $8.6 trillion or greater.
Are you beginning to feel the voodoo yet?
What’s most damning about the Romney policy, so far, is the fact that his campaign offers almost no substantive plans for where the added revenue would come from if it were to be ‘deficit neutral’ as the Romney campaign claims. In his famous ‘Big Bird’ gaffe during the most recent Presidential debate, Romney claimed he’d cut things like PBS funding. But at around 400 million per year, PBS cuts cover only 1/1000th of the revenue gap he’s created. Romney may also dump on homeowners by cutting mortgage deductions or disincentive charity by cutting reductions to charitable donations. And although these policies may fill a decent chunk of that $5 trillion dollar hole, they’re not going to fill it entirely. Meanwhile, removing those deductions greatly reduce the number of American homeowners while resulting in a severe blow to America’s charity organizations. The remainder of the money would likely come from Medicare, Social Security, and from structural tax increases to the middle class.
Fact Check’s analysis of just one piece of Romney’s plan shows how convoluted, murky, and factually devoid it is:
“The campaign hasn’t revealed where Romney would even get [the first] $500 billion in cuts. The Romney website lays out spending reductions that total $319.6 billion, which come from privatizing Amtrak, cutting funding for the National Endowment for the Arts and Humanities and foreign aid, eliminating family planning funding, cutting the federal workforce and compensation, block-granting Medicaid and work retraining to the states, and reducing “waste and fraud.” Romney also counts $95 billion a year for repealing the federal health care law. But that’s only the spending in the law, which also includes $569 billion over 10 years of new revenues that would be lost, plus another $161 billion in revenue from the individual mandate tax and penalties on employers.”
What this paragraph reveals is that Romney’s cuts come out as a potential net negative — meaning that the cuts result in more revenues lost long-term (especially when taking into account the Affordable Care Act’s repeal). Futhermore, block granting Medicaid to the states would likely result in devastating losses to seniors and the disabled who rely on Medicaid during times of health hardship. This would result in additional costs to society that would likely ripple through any budget. Loss of family planning money would hurt the already reeling poor and harm families ability to care for their future. Cutting federal workforce compensation attacks one of the pillars of the American middle class, reducing wages for hundreds of thousands. And all of this damage and sacrifice by regular Americans just to deal with the first 8% taken by Romney’s tax cut.
And what do we get for this new massive hole blown in the budget? What do we get for this sacrifice that must be born by America’s families, by the sick, and by the elderly? In a basic break down here are the cut’s results:
“The analysis concludes that Romney’s tax cuts would predominantly favor upper-income taxpayers. Those with incomes of more than $1 million would see their after-tax income increased by 8.3 percent (for an average tax cut of about $175,000). Taxpayers with incomes between $75,000 and $100,000 would see somewhat smaller increases of about 2.4 percent (for an average tax cut of $1,800), while the after-tax income of taxpayers earning less than $30,000 would actually decrease by about 0.9 percent (for an average tax increase of about $130).” — Bloomberg
In the end, according to Bloomberg, taxes are raised on those members of the middle class most near to poverty, taxes are barely cut for the middle and upper middle class. Meanwhile, the already wealthy and those in no need of help gain a huge income increase — $175,000 or more each year. So on both ends of the cut, the middle class gets hit while the wealthy, who need no help whatsoever, get another hand-out.
If this narrative sounds familiar, it should. We heard it under Bush. And Romney, rather than deciding to count losses, has instead doubled down on a policy that was a major contributor to the exploding deficit and this country’s increasing and intensifying climate of class warfare. Were Romney’s policy to push through, poverty would likely increase, the deficit would explode, critical programs would be cut (Medicaid, Obamacare, middle class salaries etc.), and tensions between the rich and the rest would only continue to rise. Romney’s plan is to double down on class warfare with another vastly unfair and destructive tax cut. Simply put, it is an arithmetic of avarice.