Romney’s new tax plan would cut his taxes but raise our debt

Here are some of Romney’s gifts to himself and other wealthy taxpayers as reported by The Progress Report.

 

First, he abolishes the “death tax.” as Republicans call the estate tax.  Only one-quarter of one percent of Americans pay this tax. They are the wealthiest taxpayers who do not need another break.

 

Secondly, he makes permanent the “temporary” special low tax rates on investments President Bush got passed.  These tax rates disproportionately benefit the wealthy and would otherwise expire at the end of this year. Romney himself paid these special low rates on a considerable portion of his sizable income.  This is the main reason why he paid such a low tax rate on his income that is not sheltered in off-shore accounts and thus not taxed at all.

 

Thirdly, Romney rewards the Wall Street contributors to his campaign and PAC by maintaining special loopholes for hedge fund and private equity managers. These loopholes allow hedge fund managers to pay capital gains tax at 15% on commissions or fees earned on trades they make with other people’s money. Commissions earned by other tax payers like saleswomen and Realtors are taxed as ordinary income. Romney’s tax return shows he used these loopholes to keep his taxes low.
 
Fourthly, Romney would cut tax rates on the wealthiest Americans by another 20 percent below Bush tax rates, which he makes permanent. Under President Obama’s plan, the wealthiest Americans will pay a top income tax rate of 39.6 percent in 2013; under Romney, they would pay just 28 percent. I guess that is worth a few hundred million dollars in campaign contributions.

 

 

Center for American Progress Action Fund’s Michael Linden says Romney’s proposed tax cut would cost four times more than the Bush tax cuts, which are chiefly responsible for the huge deficits we are running today. Linden says Romney’s plan would shrink tax revenues by an astounding $10.7 trillion over the next ten years and reduce taxes as a share of GDP to a paltry 15 percent. The only way to run the U.S. government on that level of revenue is to run massive deficits and undertake program-ending cuts in Social Security, Medicare, Medicaid, and all discretionary programs. Since Romney refuses to make cuts to defense — and indeed has proposed increasing defense spending — the deficits and the cuts would both be all the more massive as a result.

 

“Both Sides” Romney is trying to win over seniors and other voters by taking both sides of the entitlement debate. He is proposing to cut Social Security benefits and raise the retirement age to pay for these tax cuts.  He will also turn Medicare into both a voucher program like the debunked Ryan plan, and the keep traditional system we have now. Seniors apparently can switch back and forth. This is an administrative nightmare if there ever was one. 

 

As with all Republican moves to cut taxes on the rich, Romney claims his tax cuts will create jobs and grow the economy. That is the same argument Bush and his cronies made in 2001 when they enacted their tax cuts.  The record speaks for itself. The Bush tax cuts did not produce jobs. He left office hemorrhaging 800,000 jobs a month.

 

Romney is following in the path of George Bush. Cut taxes and run up debt to pay for the cuts. The Bush tax cut legacy is huge debt--$11 Trillion when he left office, and the worst Recession since the Depression. Since that worked out so badly, why would anyone one want to go there again?

 

The definition of insanity is doing the same thing the same way over and over expecting a different result.