Economist: Obama misrepresenting my study on Romney tax plan

[_Bob Loblaw]

The reality is that there is no chance in hell that Congress will do another round of tax cuts in the foreseeable future, no matter who wins the presidential election. Beastie, you're quite right that the right wing of the GOP will never agree to eliminating deductions for the wealthy, though they would be happy to pass a 20% across-the-board rate cut with no changes to deductions, which would be irresponsible. Fortunately, Romney has said that a revenue-neutral tax plan is more important than cutting taxes. Either way, it's not going to happen, just as there is no way Obamacare will be repealed.

My guess if Romney is elected (a longshot, obviously), he'll propose his plan of rate cuts and elimination of deductions. The House will pass the rate cuts but not the latter. And then the Senate will reject the rate cuts. So, Romney fulfills a campaign promise, but nothing happens.

Same with Obamacare. I think he'll do what Jerry Brown did in 1978, when California passed Proposition 13, an extremely popular cap on property taxes, which Brown had vehemently opposed. As soon as it passed, he then promised he would implement the reform in a smarter and fairer way than the Republicans who had come up with the proposition. Suddenly, he positioned himself as safeguarding something he had opposed. I can see Romney fulfilling his campaign promise by putting out a bill to repeal Obamacare, which will not pass, after which he'll appear on TV and say that he will do the best with what Congress has given him, and that will be that.

Despite all the rhetoric, I don't believe that a Romney presidency would bring drastic change to anything in Washington. People who believe the crap about Romney being some reverse Robin Hood whose priority is to screw the poor and middle class in favor of the rich are deluding themselves in the same way people who think Obama is a neo-Stalinist are.

[_Kevin Graham]

Here is the politifact.com piece from over a month ago discussing Rosen's argument:

Harvey Rosen, Princeton University "Growth, distribution and tax reform: Thoughts on the Romney proposal"

Rosen’s main point is that any assessment of the Romney tax plan that ignores its impact on economic growth is incomplete. "This is curious," Rosen said, "because increasing growth is the motivation for the proposal in the first place." Growth creates more income for the government to tax which would help offset the revenues lost through rate cuts.

Rosen said he’s not alone in thinking this oversight is odd. He said economists he spoke to were "incredulous when I told them that the numbers being discussed in the press are based on calculations that explicitly rule out any changes in labor supply or saving behavior."

Rosen readily admits that no one can accurately predict the future so he runs the numbers using three growth rates for GDP - 3 percent, 5 percent and 7 percent. By comparison, the White House budget planners assume an average rate of close to 3 percent.

Like Feldstein, he used 2009 data. Unlike Feldstein, he analyzed what happens for taxpayers making $100,000 and up, and then repeated it for those making $200,000 and up.

Rosen found that when all possible deductions are eliminated, from home mortgages to charitable giving to health insurance benefits, it means that increased revenues can balance out the money lost through tax cuts.

There is only one scenario where Rosen saw a wrinkle -- when households making less than $200,000 are shielded from the loss of deductions under certain tax and growth assumptions. Rosen saw a $28 billion gap and said "maintaining an approximately constant tax burden on high-income individuals would be more challenging." But not "mathematically impossible."

The response

Some news organizations noted the Tax Policy Center did factor in higher growth in its original study. It used a model developed by a Romney adviser, Gregory Mankiw, and found that while growth softened the burden on people making less money, the shift is still there.

"Our results are not qualitatively different, even if we include additional taxes generated from the growth effects," the authors wrote.

The center said groups including the Congressional Budget Office and the Joint Committee on Taxation take a cautious approach on assuming that tax changes alone will lead to new growth. This is particularly true when tax cuts are combined with base-broadening, which lies at the heart of the Romney plan. The center pointed to a study from two American Enterprise Institute economists that found the two changes largely cancel each other out, leaving effective tax rates about the same and thus have little impact on growth.

[_beastie]

The reality is that there is no chance in hell that Congress will do another round of tax cuts in the foreseeable future, no matter who wins the presidential election. Beastie, you're quite right that the right wing of the GOP will never agree to eliminating deductions for the wealthy, though they would be happy to pass a 20% across-the-board rate cut with no changes to deductions, which would be irresponsible. Fortunately, Romney has said that a revenue-neutral tax plan is more important than cutting taxes. Either way, it's not going to happen, just as there is no way Obamacare will be repealed.

My guess if Romney is elected (a longshot, obviously), he'll propose his plan of rate cuts and elimination of deductions. The House will pass the rate cuts but not the latter. And then the Senate will reject the rate cuts. So, Romney fulfills a campaign promise, but nothing happens.

Same with Obamacare. I think he'll do what Jerry Brown did in 1978, when California passed Proposition 13, an extremely popular cap on property taxes, which Brown had vehemently opposed. As soon as it passed, he then promised he would implement the reform in a smarter and fairer way than the Republicans who had come up with the proposition. Suddenly, he positioned himself as safeguarding something he had opposed. I can see Romney fulfilling his campaign promise by putting out a bill to repeal Obamacare, which will not pass, after which he'll appear on TV and say that he will do the best with what Congress has given him, and that will be that.

Despite all the rhetoric, I don't believe that a Romney presidency would bring drastic change to anything in Washington. People who believe the crap about Romney being some reverse Robin Hood whose priority is to screw the poor and middle class in favor of the rich are deluding themselves in the same way people who think Obama is a neo-Stalinist are.

I think you are quite right. It is difficult to separate out the campaign rhetoric from reality. Romney has said some hyperbolic things in his attempt to convince the uber-right wing that he's "one of them". But then the rest of us aren't sure whether to take these statements with a wink and a nod or take them seriously. I'm sure that others feel the same way about Obama.

In the end, there is probably very little difference between the two major parties, at least as far as economic policies are involved. And likely foreign policies, as well. Romney insists there is a big difference on foreign policy, but he seems to agree with Obama's stance quite a bit.

But there are two important differences, in my view. Social policies and health care. I think gay marriage is inevitable, no matter who is elected. But I worry about further erosion of access to (still legal) abortion in this country, with dismal results for women who will still seek abortions, as they always have throughout history. (I say this as a woman who would never have gotten an abortion, personally, but I think it's important it remain safe and legal - and rare - support free birth control!) And I worry about a republican trying to repeal ACA. I doubt that he would be successful, but you never know. I'm not saying ACA is perfect, but health care in this country has got to change. Without ACA, my own son will NEVER be able to get private health insurance due to a preexisting condition he's had since he was a child. (sorry for the derail, if I had more energy right now I'd start a separate thread but I already started one tonight, so you get this derail instead. ;)

[_Bob Loblaw]

I think you are quite right. It is difficult to separate out the campaign rhetoric from reality. Romney has said some hyperbolic things in his attempt to convince the uber-right wing that he's "one of them". But then the rest of us aren't sure whether to take these statements with a wink and a nod or take them seriously. I'm sure that others feel the same way about Obama.

In the end, there is probably very little difference between the two major parties, at least as far as economic policies are involved. And likely foreign policies, as well. Romney insists there is a big difference on foreign policy, but he seems to agree with Obama's stance quite a bit.

But there are two important differences, in my view. Social policies and health care. I think gay marriage is inevitable, no matter who is elected. But I worry about further erosion of access to (still legal) abortion in this country, with dismal results for women who will still seek abortions, as they always have throughout history. (I say this as a woman who would never have gotten an abortion, personally, but I think it's important it remain safe and legal - and rare - support free birth control!) And I worry about a republican trying to repeal ACA. I doubt that he would be successful, but you never know. I'm not saying ACA is perfect, but health care in this country has got to change. Without ACA, my own son will NEVER be able to get private health insurance due to a preexisting condition he's had since he was a child. (sorry for the derail, if I had more energy right now I'd start a separate thread but I already started one tonight, so you get this derail instead. ;)

ACA isn't going anywhere, and neither is abortion. The dirty little secret in the GOP is that they campaign on an anti-abortion platform, but they don't generally do much but throw the right a few bones now and then. True, you have zealots, mostly in the south, who pass laws such as the appalling transvaginal ultrasound law, but nationally, I can't think of a single serious challenge to abortion rights from the GOP that has gone anywhere. It's been 40 years since Roe v. Wade, which means it's settled precedent, and it would be astonishing to say the least to see it overturned. And realistically, same-sex marriage is inevitable. The courts have consistently upheld the right to marry, and even if they didn't, public opinion is rapidly changing toward acceptance. If the Republicans choose to die on that hill, they will suffer the consequences.

As far as I can see, Obama's foreign policy has been pretty much a continuation of Bush's in almost every respect. It's in social policy and fiscal policy where I think the parties diverge, but then during the Bush years, the GOP did not exactly follow its own principles in fiscal policy. To me, the choice is between a party that doesn't give a damn about debt and deficits, and another that says both are a priority but doesn't ever do anything. Needless to say, I am not enthusiastic about either party.

The only thing I'm happy about is that a close election might actually cause people to look at issues. I think the Democrats overplayed their hand in demonizing Romney. It wasn't so much that Romney dominated the debate (which he did) but that he showed people he wasn't the caricature that has been portrayed: you know, the greedy bastard who feeds babies to his pit bull, which rides on top of his car. Suddenly they can't campaign against the caricature, so they go to Plan B, which is to label everything he says a lie. Not a winning strategy, if you ask me.

Truth be told I'm depressed about our political situation. This election will not make a damn bit of difference in how things work in Washington. I'm afraid that it will take a complete political and social catastrophe to change anything, and it seems like both parties are willing to take us there.

[_beastie]

ACA isn't going anywhere, and neither is abortion. The dirty little secret in the GOP is that they campaign on an anti-abortion platform, but they don't generally do much but throw the right a few bones now and then. True, you have zealots, mostly in the south, who pass laws such as the appalling transvaginal ultrasound law, but nationally, I can't think of a single serious challenge to abortion rights from the GOP that has gone anywhere. It's been 40 years since Roe v. Wade, which means it's settled precedent, and it would be astonishing to say the least to see it overturned. And realistically, same-sex marriage is inevitable. The courts have consistently upheld the right to marry, and even if they didn't, public opinion is rapidly changing toward acceptance. If the Republicans choose to die on that hill, they will suffer the consequences.

What we now see happening on the state level is Republican state legislators making it impossible to access legal abortion. In my own state, the governor is trying to do exactly that by placing onerous and unnecessary requirements on clinics that provide abortion in the blatant attempt to shut them all down. That's happened successfully in other states. I know this isn't the doing of a president, but the republican party has created the climate in which things like this occur at the state level.

As far as I can see, Obama's foreign policy has been pretty much a continuation of Bush's in almost every respect. It's in social policy and fiscal policy where I think the parties diverge, but then during the Bush years, the GOP did not exactly follow its own principles in fiscal policy. To me, the choice is between a party that doesn't give a damn about debt and deficits, and another that says both are a priority but doesn't ever do anything. Needless to say, I am not enthusiastic about either party.

The only thing I'm happy about is that a close election might actually cause people to look at issues. I think the Democrats overplayed their hand in demonizing Romney. It wasn't so much that Romney dominated the debate (which he did) but that he showed people he wasn't the caricature that has been portrayed: you know, the greedy bastard who feeds babies to his pit bull, which rides on top of his car. Suddenly they can't campaign against the caricature, so they go to Plan B, which is to label everything he says a lie. Not a winning strategy, if you ask me.

Truth be told I'm depressed about our political situation. This election will not make a damn bit of difference in how things work in Washington. I'm afraid that it will take a complete political and social catastrophe to change anything, and it seems like both parties are willing to take us there.

I'm afraid you are correct. It is dispiriting. And yet I blame ourselves as much as our elected officials. They morph into whatever we want them to be, and we obviously are not willing and able to truly face our problems, so neither are they. Sometimes I think we, as an entire species, are doomed. We can be so brilliant, and then so obtuse and stubborn at the same time.

[_krose]

Fortunately, Romney has said that a revenue-neutral tax plan is more important than cutting taxes.

I don't see what is gained by this. How does it help the economy -- or government solvency -- to just modify the method of collecting the same amount of money from a person?

My guess if Romney is elected (a longshot, obviously), he'll propose his plan of rate cuts and elimination of deductions. The House will pass the rate cuts but not the latter. And then the Senate will reject the rate cuts. So, Romney fulfills a campaign promise, but nothing happens.

If trying and failing (such as making a proposal that the legislative branch refuses to pass) counts as a promise fulfilled, why does Obama get no credit for keeping promises?

[_EAllusion]

George W. Bush left the Supreme Court with a one vote swing in favor of overturning Roe vs. Wade and more inclined to allow further restrictions on abortion access. He restricted funding to groups abroad that offered abortion services as part of reproductive planning, thus shaping their policies. He drastically restricted stem-cell research through controlling funding sources. He signed into law the partial-birth abortion ban. His administration used the DoJ appointment process to stock the department with fundamentalist Christian lawyers from poorly regarded Bible schools trying to develop credentials to take over judicial bench seats down the road. He funnelled hundreds of millions of dollars to conservative religious groups whose mere existence helps to spread anti-abortion sentiment.

That's off the top of my head. It's not like GWB did nothing of note beyond tokenism for those opposed to abortion.

The Supreme court is one nominee from overturning Roe vs. Wade. Given that Ginsburg is more machine than human at this point, a Romney presidency represents a really decent shot at Roe vs. Wade going down. That strikes me as a big deal for the anti-abortion crowd. Most states have very strict anti-abortion laws that will immediately go into effect if Roe vs. Wade is overturned.

I thought the case was wrongly decided and am not sad about this necessarily, but I recognize it represents something far more significant than token action. The overall theme I get from your posts Bob is that you think the Republican party is still where it was when George H.W. Bush was president. You underestimate how significantly there has been an evolution in the party, especially towards the religious right.

[_Ceeboo]

Hey Bob

This election will not make a damn bit of difference in how things work in Washington. I'm afraid that it will take a complete political and social catastrophe to change anything, and it seems like both parties are willing to take us there.

BINGO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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Now that we have finally had that brief and factual interuption............back to your regular programing (Pun kinda intended)

Peace,
Ceeboo