The Many Tax Plans of Mitt Romney

Math is pretty important these days. If you’ve been watching the presidential debates, you’ve probably felt like the candidates should use a chalkboard to explain their disagreement on taxes. The numbers have been flying, and many Americans are confused.

I’m here to help. This is a tutorial on the many tax plans of Mitt Romney.

Don’t be scared. As Bill Clinton said, it’s just arithmetic.

Earlier this year, Romney announced his first tax plan. His big idea was to reduce individual income tax rates by 20 percent in addition to extending all the Bush tax cuts permanently.

So, instead of paying 10 percent, the bottom tax bracket would pay 8 percent. Instead of paying 15 percent, the next tax bracket would pay 12 percent. And so on.

But 20 percent of 35 is a lot bigger than 20 percent of 10, so high-income taxpayers would get a much bigger tax cut.

Romney also proposed cutting the corporate income tax, eliminating the estate tax, and eliminating the tax on investment income for folks earning less than $200,000.

Under this plan, the top 0.1 percent of households would get an average tax cut of $725,716, while the middle class would get $810 apiece.

But there’s a problem with this plan. It would decrease tax revenue and increase the budget deficit by $456 billion in 2015. That would almost double what our deficit is projected to be at that time.

So Mitt Romney came up with a new plan. After he cut taxes by $456 billion, he’d raise them by $456 billion.

If that sounds like a waste of time, you’re not thinking like a politician. This way, he could campaign on a huge tax cut and, at the same time, vow to reduce the budget deficit. He just wouldn’t tell people he won’t actually be cutting their taxes. Because he can’t. Not unless he wants to increase the budget deficit.

Here’s how he’d do it. After he lowered everyone’s tax rates, he’d eliminate enough deductions and tax credits to make up for all that lost tax revenue.

So, you can say goodbye to the child tax credit, the education tax credit, the charitable-donation deduction, the mortgage-interest deduction, etc, etc. I’m just making this up because Romney never specified which deductions and credits he’d eliminate. And that’s kind of important, right? He’s proposing a radical restructuring of the tax code that could have a huge effect on you, and he refuses — again and again and again — to give any details. But suffice it to say, if you benefit from any of those deductions or credits, you should be worried.

Now he’s got a new problem. For high-income households, there aren’t enough deductions and credits to make up for the massive tax cuts they’d enjoy under Romney’s plan. Even if he got rid of all those deductions and credits, they’d still get a tax cut.

If this plan isn’t going to increase the deficit and high-income households are getting a tax cut, then everyone else is getting a tax increase. In this scenario, the middle class would pay an average of $899 more in taxes, while the top 0.1 percent of households would pay $246,652 less.

So Mitt Romney came up with a new plan. Again.

In this week’s debate, Romney proposed putting a cap on itemized deductions. In this scenario, each household could use only $25,000 in itemized deductions.

Since high-income households are more likely to use more than $25,000 in itemized deductions, this plan would hit them harder. So Romney can say he’s taken the burden off the middle class.

But wait. Yep, you guessed it: There’s a problem. Again.

This plan would only raise $103 billion in 2015. If Romney keeps his promise to cut tax rates, he’d be increasing the budget deficit by $353 billion.

No matter how hard he tries, Mitt Romney can’t avoid arithmetic: Cutting taxes increases the budget deficit.

That’s why the last three Republican presidents each presided over massive increases in federal debt. That’s why Dick Cheney said, “Deficits don’t matter.” And that’s why Mitt Romney’s numbers don’t add up.

But don’t worry. I’m sure he’ll change his mind again.

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This op-ed was published in today’s South Florida Sun-Sentinel.

Three Dirty Little Words: Liberal Media Bias

“Are any of you voting for Mitt Romney?” host Jimmy Kimmel asked the audience at the Emmy’s last month. “Okay,” he said after listening to the smattering of applause, “there’s forty Republicans and the rest: godless, liberal homosexuals.”

“Being a Republican in Hollywood,” he joked, “is like being a Chick-fil-A sandwich on the snack table at Glee.”

I work in Hollywood. So I’ve seen my fair share of “liberal bias.” And I’m here to tell you that there is no liberal bias in the American media.

Oh sure, some news outlets are more liberal than others. Everyone knows that MSNBC is the channel for Democrats and Fox News is the channel for Republicans. And everyone knows that the editorial page of the Wall Street Journal is more conservative than that of the New York Times. But it is flat-out untrue that the media as a whole leans to the left.

I mention this because Paul Ryan, the Republican nominee for vice president, recently accused the media of trying to swing the election in his opponents’ favor.

All evidence to the contrary. This summer, the Pew Research Center examined the news reports of 50 major news outlets and found that 72 percent of the references to Barack Obama were negative, compared to 71 percent of the references to Mitt Romney. Similarly, statistical wunderkind Nate Silver examined the historical record and found that presidential election “polls have no…history of partisan bias.”

This won’t come as a surprise to anyone who’s spent any time studying the subject. Experts have combed through the archives looking for all sorts of bias. The Journal of Communication collected the results of 59 published research papers on media bias, and they came to three clear conclusions: In newspapers, there is no bias. In network television, there is a tiny — and I mean tiny — liberal bias. And in magazines, there is — wait for it — a conservative bias!

But you don’t have to read the Journal of Communication to figure that out. Just look around you. As media reporter David Carr pointed out earlier this week, the bestselling newspaper in America is the famously conservative Wall Street Journal, the most popular cable news channel is Fox News, and three of the top five radio broadcasters are Rush Limbaugh, Sean Hannity, and Michael Savage — and those guys make Mitt Romney look like Lyndon Johnson.

Moreover, every major news outlet is owned by a massive multinational corporation. Gannett owns the USA Today. Time Warner owns CNN. Comcast and General Electric own NBC and MSNBC. Walt Disney owns ABC. The New York Times, the Washington Post, and CBS are all listed on the New York Stock Exchange — and the majority shareholder of CBS is the billionaire Sumner Redstone.

Where do you think the sympathies of these mega-rich capitalists lie? Do you really think they’d let their news outlets dismantle the free market system that’s made them so wealthy?

And so what if they did? Is a “liberal bias” inherently wrong? Instead of asking whether a news outlet is conservative or liberal, shouldn’t we be asking if they’re right? Shouldn’t we demand, above all else, that the media tell us the truth? And what law of nature says that the truth is always nonpartisan?

It’s a fact that tax cuts for the rich haven’t increased economic growth. It’s a fact that the Earth is warming because of carbon emissions from manmade objects. It’s a fact that Palestine is a humanitarian disaster because Israel is blockading critical exports and imports.

And we’re supposed to sugarcoat these facts because they don’t fit into some people’s agendas?

The economist Paul Krugman has a famous saying: “If a presidential candidate were to declare that the earth is flat, you would be sure to see a news analysis under the headline ‘Shape of the Planet: Both Sides Have a Point.'”

And who comes up with these “sides” anyway?

In Europe, “conservatives” recoil at the idea of a government failing to allocate affordable health insurance to all its citizens. In America, rightwinger Glenn Beck gets a primetime slot on television, but a real leftist like Noam Chomsky is taboo.

Who’s the liberal equivalent of Glenn Beck? Rachel Maddow? Come on. This is a woman who said she’s “in almost total agreement with the Eisenhower-era Republican party platform.”

When was the last time you heard an American politician say that the government should give a job to every unemployed person who is willing and able to work? How many media pundits endorse tax rates above 50 percent or the abolition of nuclear weapons? Forty years ago, some of our most famous leaders were advocating exactly these solutions. Now, they’re fringe ideas at best.

Every time someone says “conservative” or “liberal,” I’m reminded of a line from the movie Princess Bride: “You keep using that word. I do not think it means what you think it means.”

My point here isn’t that we should change the system or that we should embrace leftist ideology. All I’m saying is, this is a ridiculous debate, and we must stop having it because it’s distracting us from the real issues in a very important election.

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An abbreviated version of this op-ed was published in today’s South Florida Sun-Sentinel.

Don’t Blame Colleges for Our Kids’ Problems. Blame the Economy.

As Congress tries to agree on a way to keep interest rates on student loans from rising, many Americans are questioning the value of an increasingly expensive college degree.

We’re talking about serious costs. Even in-state tuition at public colleges, supposedly the most affordable of all, is rising at more than twice the rate of inflation. The average cost for four years for in-state residents adds up to more money than most households earn in a year. Almost a third of American households have less than $10,000 in net savings to pay for at least $30,000 in college tuition. Even if students take Mitt Romney’s advice and “shop around” for the cheapest schools, they’re still going to have trouble making ends meet.

That’s why approximately 3 million households owe $50,000 or more in student loans.

At the same time, the rate of unemployment for 20-to-24-year-olds is twice the rate for 45-to-54 year-olds. Can it be that a college degree no longer buys what it used to?

Ask this question often enough, and you’re bound to find someone blaming it on “kids these days.” As if the jobs are out there, we’re just not willing to work for them.

The more sophisticated critics suggest that we’re experiencing a “labor mismatch,” where the skills of the workforce don’t meet the needs of the employers. Supposedly, colleges don’t teach us what we need to know to make a living anymore.

There are several ways to test this theory.

One measure is the “mismatch index” created by economists for specifically this purpose. The mismatch index compares the number of vacancies to the number of unemployed workers. If there really is a labor mismatch, vacancies should rise, but unemployment shouldn’t fall because the unemployed workers don’t have the skills to fill the vacant jobs.

But the mismatch index has not increased in the last decade. In fact, it was higher in 2003 than it is now.

Another measure is inflation. When the economy grows, companies should expand, but during a labor mismatch, they can’t. There aren’t enough skilled workers. So they raise prices instead. It’s the only way to keep revenues growing.

But inflation has been very steady and low throughout the past decade. In fact, it is now lower than it was five years ago.

Yet another measure is disparities in unemployment between different industries. For example, manufacturing jobs have been declining, and service jobs have been taking their place. If there’s a labor mismatch, we might see a recent rise in unemployment in manufacturing that outpaces the rise in other industries.

But that’s not the case. In fact, manufacturing has been one of the bright spots in this weak recovery. After losing jobs every year since 1997, the manufacturing industry has actually been increasing employment in the last two years.

Maybe we’re looking at the wrong industry. After all, the recession was caused by the bursting of the housing bubble. All those construction workers lost their jobs, and they don’t have the skills to become engineers or accountants or whatever the modern economy demands. Are they suffering from this mismatch?

Not really. While their unemployment rate is higher than most other industries’, it’s also declining faster than average. About 10 percent of unemployed workers used to work in the construction industry, the same as in 2005. Construction workers are actually finding new jobs at a faster rate than the rest of the unemployed, and they’re less likely to drop out of the workforce because they get discouraged at the lack of jobs. When they do get new jobs, over 70 percent of them return to the construction industry.

So what’s really causing high unemployment among today’s young adults? Probably a deadly combination of the weak economy and their lack of work experience. The most experienced workers are the first to be re-hired when the economy recovers. Unfortunately, the longer it takes the economy to return to health, the longer those young adults will lack work experience, and the harder it will be for them to catch up in the future.

Don’t blame the victims — or the colleges they attended, for that matter. Blame the people who wrecked the economy and sabotaged our children’s future.

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This op-ed was published in today’s South Florida Sun-Sentinel.

Social Security Isn’t Lying to You. But Rick Perry Is.

In 1935, when Congress created Social Security, over half of American senior citizens lived in poverty. Today, less than 10 percent of the elderly live in poverty. According to economists Gary Engelhardt and Jonathan Gruber, a $1,000 increase in Social Security benefits reduces elderly poverty by 2 to 3 percentage points.

Americans need those checks now more than ever. Since the end of World War II, it’s never been harder to save for retirement. Jobs are disappearing. Wages are barely keeping up with inflation. Education and health care costs are soaring. Pension plans are becoming a thing of the past.

So it’s not hard to understand why 34 percent of Americans have nothing saved for retirement. Nor is it surprising that 54 percent of retirees say Social Security is a major source of their income — especially because 401(k) accounts only average $98,000, which amounts to $600 per month in retirement, well below the poverty line.

But Social Security is hardly a windfall.

The average retiree will earn $14,124 from the government this year. The poverty line is $10,830. Of the 30 industrialized nations, 24 are more generous to their retirees than the U.S.

And your leaders want to reduce Social Security benefits.   Continue reading “Social Security Isn’t Lying to You. But Rick Perry Is.”

An Ode to the Unemployed: Someone’s Gotta Write It

You know who never writes op-ed columns? Unemployed people.

Think about it. By definition, every op-ed columnist is employed — by the newspaper (or a syndicate). Unemployed people don’t have a voice in the press. Literally.

There are 14 million unemployed people in the United States, and not a single one gets to tell the world how they feel.

So when we debate the $447 billion American Jobs Act proposed by President Obama earlier this week, the people who are most affected by it have the least say in its success or failure. There’s something fundamentally undemocratic about that.   Continue reading “An Ode to the Unemployed: Someone’s Gotta Write It”