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Does anyone else see the irony in this piece from a Noam Scheiber review of Bob Woodward's latest book?

Boehner proposed a deal involving $800 billion in revenue over a decade. The idea would be to gin up the $800 billion through “tax reform” rather than higher taxes—that is, lowering tax rates while closing loopholes in such a way as to increase the government’s take on balance. But, as Woodward shows, the distinction was lost on conservatives, who were dead-set against anything that raised money for the U.S. Treasury. When word of the negotiation leaked in early July, Boehner held a call with the entire Republican caucus to assure them that tax increases were off the table, just in case they got the wrong idea. It didn’t work—they got the wrong idea. House conservatives repeatedly told Boehner they considered “revenue increases” tantamount to the dreaded “tax increases.” Boehner himself concedes to Woodward that while he was negotiating with Obama, Cantor and his other lieutenants “kept saying we’re not going to do a big deal [involving revenues], can’t do a big deal.”

So, last year the Administration was saying that you could cut tax rates but increase revenue by closing loopholes (and presumably eliminating deductions), and Republicans were saying that increasing revenue is the same as raising taxes.

Now the Administration says that when Romney said he would cut tax rates without reducing revenue, he was lying. And the Republicans insist that Romney's proposal is not a tax increase.

Kind of cool how that works.

And by the way, it's hilarious to hear liberals complaining about Woodward's anti-Obama bias.

So, last year the Administration was saying that you could cut tax rates but increase revenue by closing loopholes

CFR, please? Just looking for more context here.

I think the subtle difference here is that Obama proposed to cut the tax rate on the highest brackets while also cutting their deductions, which I think is a good idea because of all the wailing and moaning you hear about the wealthy paying "35%" in taxes. The reality is that they usually pay nowhere near that amount because of all the loopholes/deductions/tax havens, etc, but still get to play the "poor persecuted us" card because of the "35%" that is on the books. I think the average effective tax rate for the highest bracket is something like 12-14% and thousands of millionaires and corporations actually get away with paying zero in income taxes or even receive a profit in deductions. So technically Obama could drop their rate from 35% to say 28% and revenues would increase because they'd actually end up paying that full 28% instead of the 35% minus deductions.

But what conservatives don't seem to understand is that when you give the middle class a tax cut that serves as a stimulus for the economy because that money goes right back into the economy. Giving a millionaire an extra few hundred thousand in tax breaks just means that's an extra few hundred thousands that's going to sit in their bank account earning interest for them. I remember some studies concluded that something like $1 of stimulus produces $1.50 of economic growth. But giving tax breaks to the wealthy, which is all Romney is about, doesn't stimulate the economy. It never has. It is just one of the old well refuted Supply Side myths conjured up by the Right Wing media this past decade. Conservatives came out left and right admitting that tax cuts for the wealthy do not pay for themselves. Even economic advisers for Reagan and Bush admitted this.

Kevin Graham wrote:CFR, please? Just looking for more context here.

Here you go: http://www.tnr.com/book/review/bob-wood ... f-politics

I think the subtle difference here is that Obama proposed to cut the tax rate on the highest brackets while also cutting their deductions, which I think is a good idea because of all the wailing and moaning you hear about the wealthy paying "35%" in taxes. The reality is that they usually pay nowhere near that amount because of all the loopholes/deductions/tax havens, etc, but still get to play the "poor persecuted us" card because of the "35%" that is on the books. I think the average effective tax rate for the highest bracket is something like 12-14% and thousands of millionaires and corporations actually get away with paying zero in income taxes or even receive a profit in deductions. So technically Obama could drop their rate from 35% to say 28% and revenues would increase because they'd actually end up paying that full 28% instead of the 35% minus deductions.

How is that different from the Romney proposal to cut the top rate from 35% to 28% and eliminate the loopholes and deductions? And more importantly, why do you think Romney is lying when he proposes to do exactly what you are suggesting?

But what conservatives don't seem to understand is that when you give the middle class a tax cut that serves as a stimulus for the economy because that money goes right back into the economy.

Which is why Romney is proposing a 20% cut for the middle class. Last I checked, Obama is not proposing any further tax cuts. So, please explain why what you just described as being a good economic stimulus is wrong.

Giving a millionaire an extra few hundred thousand in tax breaks just means that's an extra few hundred thousands that's going to sit in their bank account earning interest for them. I remember some studies concluded that something like $1 of stimulus produces $1.50 of economic growth. But giving tax breaks to the wealthy, which is all Romney is about, doesn't stimulate the economy. It never has. It is just one of the old well refuted Supply Side myths conjured up by the Right Wing media this past decade. Conservatives came out left and right admitting that tax cuts for the wealthy do not pay for themselves. Even economic advisers for Reagan and Bush admitted this.

CFR that Romney is proposing to cut taxes only for the wealthy. I'm not trying to be hostile but wondering where you are coming from with this.

And by the way, the irony is on both sides. The Republicans were appalled at raising revenue if it meant reaching a deal with Obama, but now they're just fine with Romney doing it. And the Democrats were fine with cutting tax rates but raising revenue by closing loopholes, but now that Romney is proposing it, they call him a liar. It's just funny how both sides can be so transparently partisan.

How is that different from the Romney proposal to cut the top rate from 35% to 28% and eliminate the loopholes and deductions?

The difference is that Romney wants to target deductions across the board, for low incomer earners as well. As I explained in a previous thread, Romney already considers half the country lazy moochers who don't pay taxes at all. It is precisely because of those deductions that so many people don't pay federal income taxes. So whats a 20% cut from zero? Zero! So he'll cut the tax rate on something they're not paying under Obama. But under Romney they will have to pay income taxes, albeit at a "20% lower" rate.

And more importantly, why do you think Romney is lying when he proposes to do exactly what you are suggesting?

Because he has struggled to tell the truth on the basics of his tax plan. He calls Obama a liar, for essentially telling the truth about what his plan does: favor the wealthy. This guy is a flip flopping deceiver, period. Now he is going on TV telling everyone he meant something entirely different with his "47%" rant. He plays us all for fools.

Which is why Romney is proposing a 20% cut for the middle class.

Again, the caveat here is that there will be a removal of the deductions, which means a larger portion of the working class will pay more under Romney, despite his lip service about a tax cut. Notice he isn't promising that people will actually pay less in taxes under his plan. He is only speaking to the official tax rate, which has always meant nothing thanks to our complex revenue system that factors in a plethora or deductions/loopholes.

Last I checked, Obama is not proposing any further tax cuts.

Of course not. We're in a period of record low taxes for the wealthy (which have done nothing for the economy) and in case you haven't heard, the rest of us pay no income taxes at all!

So, please explain why what you just described as being a good economic stimulus is wrong.

I think I just did. It is only good economic stimulus when the tax cuts are for the middle/poorer class. They are the ones who turn around and dump that money right back into the economy. This is why Food Stamps -which the Republicans reject on moral grounds because they can't help just judge others in the most unchristian way - have been shown to be effective economic stimulus. Also, unemployment benefits, which the Republicans overwhelmingly oppose, have also been shown to serve as an effective economic stimulus.

Under Romney, the amount of money in the hands of the poor/middle class will drop dramatically because he is likely to cut most of the programs that benefit them. And with his bogus "tax cut" for those he already said don't pay taxes, he will be shifting most of the economic stimulus that exists today, into the investment accounts of the wealthy. It is the same song and dance from the Republicans every election year. Why do you think it is such an important piece to his campaign? When election time rolls around the Right Wing media already starts propagating this guilt about how the suffering rich pay too much in taxes and that a primary concern we should have is reducing their burden!

The wealthy, especially the wealthy Republicans, are infatuated with tax cuts for the upper class. Now let's just assume for a second that Romney's plan makes sense mathematically, and he will be able to produce enough revenues from the tax cuts so that these cuts pay for themselves. Even in this unlikely scenario, it sure does seem like a lot of work just to break even with where you started. I mean the only people who could possibly benefit from this are the wealthy.

Finally, state and local aid happens to be an uncommonly effective form of stimulus. The difficulty with most stimulus spending is that not all of it gets spent. Tax breaks, for instance, often get saved. Mark Zandi, the chief economist for Moody's Economy.com, estimates that cutting the corporate tax rate gets you only 32 cents in stimulus for every dollar you spend on it. That's not the case with state and local aid. When you're plugging state budget gaps, you know that money will be spent, because it was being spent before, and usually on something that the state's residents actually wanted.

Zandi estimates that every dollar spent on it actually gets you $1.41 in stimulus. It's the best anti-anti-stimulus you could ask for. -- http://www.washingtonpost.com/wp-dyn/co ... 03289.html

These are the specific things Obama has done to boost the economy. Of course he wanted to provide much more stimulus, and that is the reason many economists conclude the recovery hasn't been as quick and robust as it otherwise would have been. But the Republicans have blocked Obama's attempt to provide further economy-boosting stimulus because they realized it actually works, and what they want more than a robust recovery, is Obama out of office.

Of course when these studies are made known the Republican headquarters down at FOX News went ballistic.

I am a Republican, and I resent the assertion that I am morally opposed to Food Stamps or unemployment benefits. I've received the latter but not the former, though I've taken advantage of WIC, which is another program I enthusiastically support. You are acting like the reverse of bcspace and Droopy, assuming that all conservatives measure up--or down--to your stereotypes.

The big difference I have with you is that you assume that tax rate cuts on middle and lower income earners will be accompanied by corresponding eliminations of deductions. I haven't seen anything suggesting that's Romney's plan; in fact, I've heard quite the opposite. The one thing that reassures me is that I have heard both Romney and Ryan say that revenue-neutrality and maintaining the wealthy's share of taxes have priority over tax cuts.

It drives me crazy that so many Democrats would rather pretend we are some caricature than actually discuss what we believe and how we can work together. I know, a lot of conservative media does exactly the same thing in reverse, so I'm not claiming innocence. But some of us do not watch Fox News or listen to Rush Limbaugh. And some of us realize that we are going to have to compromise to solve the completely fucked-up fiscal condition of our country. It does no good to blather about who is a socialist and who wants to screw the middle class in favor of the rich. Both are ridiculous caricatures that make for good soundbites, but not good government.

More later, gotta run, but I'll just say you're an exception Bob, not the rule. I mean really, do we need to point this out? You can't deny that Romney and especially his chosen running mate, oppose government programs that help the poor.

I don't think Romney opposes government programs that help the poor. It's hard to know exactly where Romney stands because his positions shift all over the map. His position is whatever it is politically convenient at the time. This is true of most politicians to an extent, but his case is the most extreme that I've seen in my living memory. That makes it hard to predict what exactly he'll do as president, but I can pretty much guarantee it will not be an effort to eliminate all assistance to the poor. The difference here is more a matter of degree and priority when it comes to those programs, not a desire to blanket eliminate them. You probably will see a shift in fiscal burden to lower economic rungs while the wealthy prosper more, but that's not the same thing as wiping out the myriad ways the federal government aids the poor.

EAllusion wrote:I don't think Romney opposes government programs that help the poor. It's hard to know exactly where Romney stands because his positions shift all over the map. His position is whatever it is politically convenient at the time. This is true of most politicians to an extent, but his case is the most extreme that I've seen in my living memory. That makes it hard to predict what exactly he'll do as president, but I can pretty much guarantee it will not be an effort to eliminate all assistance to the poor. The difference here is more a matter of degree and priority when it comes to those programs, not a desire to blanket eliminate them. You probably will see a shift in fiscal burden to lower economic rungs while the wealthy prosper more, but that's not the same thing as wiping out the myriad ways the federal government aids the poor.

I agree, his position yesterday is no guarantee of his position today or tomorrow.

Kevin Graham wrote:

How is that different from the Romney proposal to cut the top rate from 35% to 28% and eliminate the loopholes and deductions?

The difference is that Romney wants to target deductions across the board, for low incomer earners as well. As I explained in a previous thread, Romney already considers half the country lazy moochers who don't pay taxes at all. It is precisely because of those deductions that so many people don't pay federal income taxes. So whats a 20% cut from zero? Zero! So he'll cut the tax rate on something they're not paying under Obama. But under Romney they will have to pay income taxes, albeit at a "20% lower" rate.
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If I recall Romney plans to keep the Bush tax cut intact then cut 20% from there. If that is the case those who don't pay tax now shouldn't pay tax under Romney's plan unless they really do lose a lot of deductions. But keep in mind that most of the lower income people don't have enough deductions to exceed their standard deduction so assuming the standard deductions stays the same or higher (as Romney suggests) they should not see their tax increase.