Simple Mathematical Proof that Obama was Wrong
- JaxsonRaineposted 12 years ago
0Greetings, Jaxson. Just between you and me, you are one of my favorite posters.
I follow your arithmetic, agree with your numbers, but disagree with your conclusion. You clearly understand the math. However, you clearly do not understand the political realities that trump your calculations. While your numbers prove a possibility, your conclusion is a giant leap in improbability. As is always the case, the devil is in the details.
A common observation from the first presidential debate goes like this: “However, Romney says he wants to pay for the tax cuts by reducing or eliminating tax credits, deductions and exemptions. The goal is a simpler tax code that raises the same amount of money as the current system but does it in a more efficient manner. The knock on Romney's plan, which Obama accurately cited, is that Romney has refused to say which tax breaks he would eliminate to pay for the lower rates.” {1}
…and your reply…I think it is fair to say Ralph sees a problem in the probability and not in the possibility of your math. I am not sure “tens of thousands of deductions, exemptions, and credits” is accurate but it does highlight the biggest flaw in the Romney plan. President Obama may be correct in saying the plan in impossible because, as a sitting president, he knows from experience something the governor has yet to learn. Specifically, just because you are elected president does not mean you will get everything you wish for.
Each one of those “thousands” of tax benefits has a powerful and influential constituency that will fight to preserve their pet deductions. Gov. Romney can not be specific and he can only say all deductions are “on the table” because he really does not know if, in the end, he can eliminate any loopholes to deliver a revenue neutral tax reform. Just look at his party. How many conservative congressmen with a huge religious-minded base will support eliminating charitable deductions? How many conservatives in Congress, whose campaigns are funded by Wall Street bankers, will support eliminating mortgage interest deductions? No American politician will go against the oil giants. As a result, Jaxson, proving Gov. Romney’s revenue neutral tax reform is possible becomes irrelevant when exposed to the glaring sunlight of Washington politics.
Here is another example of why I am skeptical about achieving tax reform without increasing taxes for all Americans. “The alternative energy heavy NextEra Energy already had six different firms helping it lobby on tax policy when it brought Akin Gump Straus Hauer and Feld, one of the three biggest lobbying firms in Washington over the past decade, into the fray in the last months of 2010. A tax fight was gearing up and NextEra Energy, along with other companies, sought to preserve newly won tax breaks that have helped to push their tax burdens to among the lowest in the nation.” {3}
So, Jaxson, I am not an expert in these matters. My opinion is not worth a hoot or a holler but that hasn’t stopped me from speaking out in the past. The Romney revenue-neutral tax reform is impossible despite the math in your simplistic model. Unfortunately, if Mitt Romney is elected and he tries to implement his “plan”, the results could be disastrous for the poor and less fortunate in America.
The Center on Budget and Policy Priorities paints a bleak picture of the future. “If policymakers repealed health reform (the Affordable Care Act, or ACA) and exempted Social Security from cuts, as Romney has suggested, and cut Medicare, Medicaid, and all other entitlement and discretionary programs by the same percentage to meet Romney’s overall spending cap and defense spending target, then they would have to cut non-defense programs other than Social Security by 22 percent in 2016 and 34 percent in 2022.”
“If they exempted Medicare from cuts for this period, the cuts in other programs would have to be even more dramatic — 32 percent in 2016 and 53 percent in 2022.” {4} If this happens, Jaxson, the US economy is going to tank so badly, Mrs. Romney may have to give up one of her Cadillacs.
{1} http://www.nydailynews.com/news/politic … -1.1174495
{2} http://taxpolicycenter.org/taxtopics/romney-plan.cfm
{3} http://sunlightfoundation.com/blog/2011 … ve-energy/
{4} http://www.cbpp.org/cms/?fa=view&id=3658
- JaxsonRaineposted 12 years ago0
- JaxsonRaineposted 12 years ago0
Quill, I respect your posts, you keep me in line sometimes
First, I just wanted to show that the people saying Romney's plan is impossible, are wrong. It's not impossible at all.
Second, it's late and I don't want to look at any new numbers, so that stuff you posted will have to wait.
However, I do think that Romney is the guy who could get it done. He's worked with a 'hostile' legislature in the past, and gotten the tough decisions made. He's show a willingness to compromise.
I don't think people will be so adverse to giving up their deductions, or limiting their deductions, if it is coupled with a tax decrease that means their effective rate won't change. If we are most worried about the middle class, we could simply limit deductions to $100,000... that would probably not affect a single middle-class family out there.
For businesses, they won't care if they can't deduct certain things if it means their rate stays the same. It will help new/smaller businesses because their initial rate won't be so high. It will help everyone because the code won't be so difficult. It will make the fairness people happy because GE won't be paying 'too low' of a tax rate anymore(they pay about 20%, where the average in the nation is about 25%).
I'm glad to see Romney say that he is willing to work at the problem from any angle he can. He's not saying "I want to look at this and this and this". He's saying "I want to look at everything, and do anything that we can all agree on. If that doesn't work, we can approach it from another angle, or another angle."
Look at Obamacare... that was my way or the highway. That was we won't even give you time to read it before you vote on it, we have to pass it to find out what's in it.
That's not what Romney is proposing, and I"m glad.
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