Sadly, last night continued the string of national debates that basically featured little or no discussion of how to immediately move the country out of its jobs crisis, or at least nothing beyond the dispiriting “stay the course” of the current Administration, and the irrelevant “five-point plan” of the challengers, which offers nothing in a near-term context on jobs. Vice President Biden managed to defend the stimulus through an effective hit job on Paul Ryan’s behind-the-scenes support for it, and he painted a picture of the depths of the crisis that told that familiar “road we’ve traveled” story. But this is not a plan for how to lower the unemployment rate immediately over the next 12-18 months, even though the Administration has a policy that would at least begin to do that in the American Jobs Act. Even the long-term job-related policies don’t take into account large and important issues that will help determine our economic future, in particular the need for more immigration into the country as a policy for economic growth.
So what is there left to talk about when we’re not going to talk about jobs? Taxes, of course. Taxes can support a job strategy in the absence of more preferable policies, but that wasn’t the subject of the discussion, anyway. It was a values-based argument over whether progressive tax policy, a settled principle for 100 years in America, should be furthered, to increase the burden on those Americans who can most afford it and lighten that burden on those who cannot.
Paul Ryan and his Presidential running mate have a plan for tax policy with no details. They simply want a 20% across-the-board tax cut, which will of course mean a prodigious amount of savings for the rich. They don’t really want to offset it with loopholes – they don’t mention closing loopholes at all in the tax discussion on the official campaign website – and the principles they’ve laid out don’t add up. You cannot cut taxes across the board by 20%, reject increases to tax rates for capital gains and dividends, keep the tax system revenue neutral and take all of that from deductions for the wealthy, so that middle-income Americans see no tax increase and “the share of income that is borne by the high-income earners” remains constant. “Share of income” is important weasel language, because that’s a function of the share of income that flows to the top as much as the tax rates, and of course this share of income has increased markedly in recent years.
But the math equation here is just impossible, and Ryan had to evade answering any specifics to defend it. Any specific would have shown the math to be bogus, and Biden did a decent job trying to pin Ryan down and exposing that mathematical impossibility. Ryan’s alibi that he wants to give maximum flexibility to Congress on the details is pretty weak. Conservative Josh Barro sums this up pretty well.
They say they have six independent studies — six! — that “have confirmed the soundness of the Governor’s tax plan,” and so I should stop whining. Let’s take a tour of those studies and see how they measure up.
The Romney campaign sent over a list of the studies, but they are perhaps more accurately described as “analyses,” since four of them are blog posts or op-eds. I’m not hating — I blog for a living — but I don’t generally describe my posts as “studies.” [...]
There are only meaningful “alternatives” to discuss with Congress if Romney can pick and choose from a pool of tax preferences for the wealthy that far exceeds the $250 billion annual cost of his rate cuts for them. If the pool of available base broadeners is just large enough to finance his tax cuts, then Romney actually is dictating a plan to Congress: if they don’t eliminate exactly the set of preferences he proposes, his plan will either have to raise taxes on the middle class or grow the deficit.
TPC finds that Romney’s rate cuts, plus elimination of the estate tax and Alternative Minimum Tax, would cost the Treasury about $250 billion in revenue from high earners. If he could somehow find, say, $300 billion in base broadeners from the wealthy, $15 billion of which would have to go to a phaseout, that wouldn’t leave a lot of “alternatives” on the table. Yet there aren’t enough base broadeners for Romney to reach the $300 billion level, let alone exceed it.
Read the whole thing, Barro debunks all six “studies.”
There actually is a meaningful difference between the candidates here. But again we had a discussion ostensibly about jobs devolve into a tax argument. Jobs just aren’t sexy enough, I guess.
P.S. Biden kept referring to millionaires, and I had some concern that he moved the dividing line back from a $250,000 threshold for expiration of the Bush tax cuts back to $1 million. But the campaign claims that’s not true, and that the $250,000 dividing line holds.