Friday, August 3, 2012

Taxes and Romney: How the Rich get Richer--at the National Level

Ten years of Bush tax cuts for the wealthy have increased the divide between the haves and have nots in the country--the rich keep getting richer while the poor keep getting poor. In fact, according to Bloomberg, based on US Census data:
Since 1980, about 5 percent of annual national income has shifted from the middle class to the nation’s richest households. That means the wealthiest 5,934 households last year enjoyed an additional $650 billion -- about $109 million apiece -- beyond what they would have had if the economic pie had been divided as it was in 1980, according to Census Bureau data.

A Romney president would change all that right? Wrong. Of course he's offering more of the same. Romney's tax plan came under intense fire, as you may know, because the Brookings and Urban Institute's Tax Policy Center indicated that people like Romney would get their taxes lowered while middle and lower income people would face tax increases. As the report states:
“It is not mathematically possible to design a revenue-neutral plan that preserves current incentives for savings and investment and that does not result in a net tax cut for high-income taxpayers and a net tax increase for lower- and/or middle-income taxpayers Even if tax breaks are eliminated 
in a way designed to make the resulting tax system as progressive as possible, there would still be a shift in the tax burden of roughly $86 billion [a year] from those making over $200,000 to those making less than that.

What would that mean for the average tax bill? Millionaires would get an $87,000 tax cut, the study says. But for 95 percent of the population, taxes would go up by about 1.2 percent, an average of $500 a year."

Ezra Klein, the super sharp, interdisciplinary, all-in-one political wonk who works for Bloomberg, the Washington Post, Bloomberg, and occasionally sits in for Rachel Maddow, explained that this wasn't a partisan study, but that the Romney camp framed that that way regardless (shocking, I know!): 
The Romney campaign offered two responses to the Tax Policy Center’s analysis, one more misleading than the other. 
First, the campaign called the analysis “just another biased study from a former Obama staffer.” That jab refers to Adam Looney, one of the study’s three co-authors, who served in a staff role on the White House Council of Economic Advisers under President Barack Obama. But the Tax Policy Center is directed by Donald Marron, who was one of the principals on George W. Bush’s Council of Economic Advisers. Calling the Tax Policy Center biased simply isn’t credible -- a point underscored by the fact that the Romney campaign referred to the group’s work as “objective, third-party analysis” during the primary campaign.
Then the Romney campaign said, “The study ignores the positive benefits to economic growth from both the corporate tax plan and the deficit reduction called for in the Romney plan.” There’s a reason the study ignores those “positive benefits”: Romney has called for a revenue-neutral corporate tax plan that brings the rate down from 35 percent to 25 percent while also promising to balance the budget. He has not said how he will achieve either goal. Until he does, those positive benefits -- if they exist -- are impossible to calculate. 
Basically, Romney is offering the same policies that Bush offered, and that clearly don't work: lower taxes for the wealthiest and low spending--both of which are proven do not improve the economy

1 comment:

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