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Home Publications Blogs Beat the Press Washington Post News Article Praises Romney for Lying About His Tax Plan

Washington Post News Article Praises Romney for Lying About His Tax Plan

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Friday, 05 October 2012 04:48

The Washington Post ran a front page piece on Governor Romney's debate performance that was headlined, "Romney benefits from rigorous defense of tax plan." The article begins:

"With his forceful denial of charges that he would raise taxes on the middle class, Mitt Romney used Wednesday’s debate to launch an aggressive new effort to regain his footing in the battle over taxes.

In one of the debate’s first exchanges, the Republican presidential nominee directly challenged President Obama’s assertion that Romney’s tax plan would finance big new breaks for the wealthy by wiping out popular deductions for those who earn less than $250,000 a year."

As the article later explains, Romney's assertion is inconsistent with his past description of his tax plan. Romney proposes to cut income tax rates by 20 percent but also to have a deficit neutral tax cut. He argues that the lower tax rates will be offset by eliminating tax deductions.

However, it is not possible to make up the lost revenue from lower tax rates on the wealthy simply by taking away tax breaks for the wealthy. (Romney explicitly rejected raising the tax rate on capital gains or dividends, so the main tax break for the wealthy is off-limits.)

The point here is very simple. If you cut Warren Buffett's tax rate by 20 percent you will not get back the money by taking away his mortgage interest deduction. This is why every independent economist who has analyzed the tax cut has said that Romney's plan implies large tax increases on middle income families. However the Washington Post is apparently proud of Romney for denying for boldly denying this fact. 

 

Comments (8)Add Comment
Media misses new false argument in Romney's tax statement
written by Robert Salzberg, October 05, 2012 7:32
Mitt Romney repeatedly said he'd lower taxes for the middle class but not lower taxes for the wealthy. Romney also states his plan will be revenue neutral.

I guess some small increase in taxes because of growth could be used to reduce taxes on the middle class but that is not the traditional trade-off for revenue neutrality.

Romney and Obama both look to end the payroll tax cut which will be a 2% tax increase for the vast majority of middle class families. The expiration of the payroll tax cut will likely be more than any growth effect on tax revenues.
Extra special "truthiness" bonus graph from the article
written by anonymousToday, October 05, 2012 10:03
The graph that goes with the article has the bonus of minimizing the millionaires tax cuts relative to loophole closing tax increases.
For the group with incomes greater than $1M the cuts are twice the size of the increases. But the graphic makes it look like there is about 20 percent more tax cuts than loophole closings for the richest.

The Post's team used a broken bar to represent the $1M tax cuts so that they could keep the same scale and have any differences show at the lower incomes while using a bar chart.

The article is surrounded by Lori Montgomery and Glenn Kessler, so it all sort of hangs together in a "truthy" way.
Here is the link to the graphic
written by anonymousToday, October 05, 2012 10:39
winning
written by rz0, October 05, 2012 12:13
Depressing how Romney's debate victory focuses exclusively on his demeanor vs. Obama and not the truth of his statements vs. the truth of Obama's.
If we aren't going to focus on the truth, why are we having a debate?
the future of the united states
written by mel in oregon, October 05, 2012 2:31
well, we have two candidates with little to choose from if you are a progressive. romney, the habitual liar about everything he talks about. you can be very sure that if he is elected the long-term damage inflicted by him will be staggering. the environment will suffer as global warming will be greatly helped along with romney's energy policies. if you are poor or middle class you will be much worse off 4 years from now. your children & grandchildren will suffer in the decades ahead because of the tea party positions romney will adapt. we'll be extremely lucky if this character doesn't start ww3. obama? there have been many takes on his poor showing in the debate. so i'll throw in my 2 cents worth. it looks like obama is tired of the presidency. he knows he is not helping the people in this country that need help, that his main objective is compromising with the opposition, & not saying a word that wallstreet disagrees with. his advisers & cabinet are all wallstreet wealthy flunkies. so my take is, deep down in his soul he is ashamed of what he has become. however, this will have no bearing on his policies should he be reelected, the country will produce more minimum wage, dead end jobs. the stock market will grow. bernanke & his successor will continue qe & other policies that move money from the poor & middle class to the super wealthy. social security & medicare will take a hit. the media will continue to be as insipid as jim lehrer was tues. night. a dark future for all but the well-to-do. have a nice weekend.
Capping itemized deductions
written by AndrewDover, October 05, 2012 2:45
Actually it IS possible "to make up the lost revenue from lower tax rates on the wealthy simply by taking away tax breaks for the wealthy."

You simply cap their itemized deductions at the maximum taxable amount for social security, which is $110,100 now. That essentially wipes out the state, local tax and home mortgage and charitable deductions for those with higher incomes.

For Mitt Romney, lowering his rate by 20% on $4 million in interest would save him $ 280,000 assuming a 35% rate.
(Assumes his dividend and capital gain rates are unchanged)

If you capped his itemized deductions, Mitt Romney would have an additional $ 4.57 million of taxable income which would thefore exceed his savings from a lower tax rate.

http://www.mittromney.com/disclosure/mitt/tax-return/2011/wmr-adr-return

AS far as Warren Buffet goes, in 2010 his $39 million of taxable income was far less than his $62 million of gross income. So capping his itemized deductions would also increase his tax substantially.

And capping the amount of capital gains and dividends to which lower rates apply would also tilt the tax system away from those with high incomes.
...
written by urban legend, October 05, 2012 11:26
No way will there ever be a cap on charitable contributions. The lobby for keeping that is probably by far the strongest in the country.

That leaves (1) home mortgage, and it's already capped at $1,000,000; nothing much to do there; (2) state and local income. Assume the state income tax on Warren Buffet's alleged $39 million in taxable income is 5%: that's $1.95 million at most recovered from capping that deduction, and that's the most we'll get. Dropping the top marginal rate from 35% to 28% will lose $2.73.

Eliminating politically-feasible deductions on the very wealthy is unlikely to make up for the lost revenue from lowering the rates. It's probably wise to assume the people who studied the question had some idea what they were talking about. Haven't seen any push-back from Romney-friendly experts either.
Vote For Me
written by FoonTheElder, October 09, 2012 1:19
Vote for me, I'm for everything you want...until I'm elected.

Is there any side of any issue that Romney has not been for at one time or another?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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