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.

Romney’s Energy Plans Don’t Bode Well for the Future

Mitt Romney has officially given up on the future. At least, that’s the way it looks from the energy plan he released last month.

The future is in peril for a number of reasons. Climate change is slowly eroding the environmental stability we’ve enjoyed for centuries. The wide gap between what we import and what we export is driving manufacturing jobs overseas. And our dependence on foreign oil embroils our national security in the explosive Middle East.

With his new energy plan, Romney surrendered on all three fronts.

When Romney proposed expanding oil drilling to previously restricted areas, he was probably listening to people like Fox News commentator Peter Morici, who has said, “Oil imports could be cut by two-thirds by boosting U.S. oil production to 10 million barrels a day.”

Only one problem: It’s impossible.

According to the Energy Information Agency, even if we open all those lands to exploration, our current production of 6 million barrels per day will never grow to more than 7.5 million, let alone 10. There just isn’t enough oil under the ground — and even if there were, it wouldn’t be available for another decade.

So we will always import oil — unless we replace it with something else.

By “something else,” of course I’m referring to renewable energy. The Romney plan, however, doesn’t propose a single policy to encourage the development and export of renewable energy technologies. Instead, it advocates even less oversight of an industry that experienced the worst environmental disaster in American history only two years ago.

Romney’s preference for oil over solar and wind power is particularly striking in light of his party’s alarmism over inflation (which never seems to materialize when they say it will). After all, oil prices have been rising for three decades, while manufacturing prices have been falling.

Since the 1990s, installation costs for wind power have fallen by 90 percent. In last year alone, solar panel prices fell 50 percent. Compare that to gas prices, which…well, you know.

Someone needs to tell Mitt Romney: You can’t be an inflation hawk and an oil bull at the same time. If you commit the nation to more oil, you’re committing to rising prices.

For a candidate so enthralled with innovation and entrepreneurship, it’s especially astonishing to see Romney’s indifference to the renewable energy market. If any industry could close the trade deficit with China, it’s solar and wind power, where China has much less advantage than in other manufactured products because labor only accounts for 4 percent of the total cost. “Imported oil and subsidized imports from China account for nearly the entire trade gap,” according to Morici.

So why not kill two birds with one stone?

Once upon a time, the federal government would have supported a blossoming industry like renewable technologies. Back when it was the fastest-growing economy in the world, the United States had the world’s highest industrial tariffs, protecting its young factories until they were strong enough to compete with foreign firms.

No longer. Under the rules of the World Trade Organization, high tariffs are not allowed, except in retaliation to a foreign competitor’s protectionism. China, for example, is now paying such a price for subsidizing its solar companies, giving them an unfair advantage over American firms like SolarWorld.

But, in many ways, the damage is done. Since receiving subsidies from the Chinese government, several Chinese companies have overtaken their American competitors. If we want to fight back, we’ll have to do the same with loan guarantees, tax credits, and major government purchases (all of which are allowed by the WTO).

But the Romney plan features nothing of the sort.

Sadly, we’ve seen this indifference before. As Judith Stein documents in Pivotal Decade: How the United States Traded Factories for Finance in the Seventies, we have watched too many opportunities go by since the 1970s, allowing foreign governments to subsidize their manufacturers while ours closed factories.

This is another such opportunity. But instead of seizing it, Romney is content to allow it to fall into the hands of the Chinese, just as he is willing to let the environment fall into the hands of Big Oil. The future will just have to fend for itself.

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

The World That Mitt Romney Wants to Build…for the One Percent

“A gaffe is when a politician tells the truth — some obvious truth he isn’t supposed to say.” — Michael Kinsley

Mitt Romney really stepped in it this time. His only saving grace is that no one noticed…yet.

In a recent interview with Fortune magazine, Romney indicated that, under his tax plan, “high-income people would continue to pay the same share of the tax burden that they do today.”

This quote doesn’t sound like a gaffe until you put it together with the rest of Romney’s promises. Under his tax plan, those “high-income people” would face much lower tax rates.

This seemed odd to me. The same tax burden with lower rates? Wouldn’t that mean they’d have to earn a heck of a lot more money before taxes?

As it turns out, yes. Yes, they would.

If Romney gets his way, the top 1 percent will pay an average federal tax rate of 22.5 percent, down from the 28.3 percent rate they paid in 2007. The average federal tax rate for the nation as a whole will fall from 19.9 percent to 17.4 percent. (This is assuming Romney doesn’t eliminate a bunch of deductions and credits, in which case most people’s tax rate would actually go up and the number I’m about to report would be worse. I’m giving Romney the benefit of the doubt here.)

In 2007, the top 1 percent paid 26.2 percent of the nation’s taxes. In order to maintain that share of the tax burden, as Romney suggested in his interview, the top 1 percent would have to earn 33.9 percent of the nation’s pretax income.

33.9 percent. One in three dollars of our nation’s output will go into the pockets of the richest 1 percent. To put that into context, in 2007, the top 1 percent pocketed 18.7 percent of pretax income. In 1979, they earned 8.9 percent.

Let’s take Romney at his word. Let’s try to imagine what the world will look like if the top 1 percent earns 33.9 percent of pretax income.

In order to earn that much income, CEO compensation will soar. The financial sector will probably double its share of corporate profits. Leveraged buyouts and other short-term gimmicks will become more prevalent, and many more manufacturing jobs will disappear, replaced by low-wage, no-benefit service jobsif they’re replaced at all. Wages for the average worker will decline relative to inflation. Most households will have to work more hours just to maintain their standard of living, but even that won’t be enough. Households will sink deeper in debt just to stay afloat. As a result, financial crises will become more frequent and more prolonged. Wall Street will thrive, creating ever more complex financial securities that prey on ever more naïve borrowers.

That’s another thing: Lack of education. Well, you can expect poverty to go up, and therefore students’ test scores will go down. But don’t expect the government to pick up the slack with more funding because the top 1 percent is no friend to high public education spendingor food stamps or Medicaid or pretty much anything that would help poor kids.

And in a world where they’re earning one-third of the nation’s income, the top 1 percent is going to have twice the influence they currently have in Congress. So you can expect plenty of corporate subsidies, especially for Big Oil. Forget about clean energy. We’ll import all that stuff from China. You see, the 1 percent doesn’t like to nurture new industries when they threaten the old monopolies.

Of course, not everyone in the 1 percent thinks or acts the same. They’re a diverse and brilliant and, in many ways, admirable bunch. But 1 percent of the population should not control one-third of the economy, no matter how impressive they may be.

You may think I’m an alarmist. Surely the future won’t be that bad.

Well, guess what: Everything I just described has been happening for the past three decades. And it all happened while the 1 percent doubled its share of pretax income.

Welcome to the future. How do you like it so far?

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

A Most Cruel, Cynical Duo

In reaction to today’s news that Mitt Romney has chosen Rep. Paul Ryan as his running mate, I’m reproducing my op-ed from April on Ryan’s claim to fame — his budget proposal:

Do you think the government should spend less money on Medicare? On Medicaid? On education? On aid to the poor? On veterans’ benefits?

If you’re like most Americans, your answer to all of these questions is, “No.”

According to a recent poll, less than a quarter of Americans want the government to cut spending on these programs. Even the majority of Republican primary voters are opposed to such reductions.

Yet House Republicans recently passed a budget that significantly reduces spending for all these programs. And those same Republican primary voters are most supportive of the one candidate who has publicly endorsed this budget: Mitt Romney.

Clearly, most Americans have no idea what Romney and the author of the budget, Republican Congressman Paul Ryan, stand for.

Ryan’s budget slashes spending from almost everything except Social Security and defense. Of the $5.3 trillion he wants to eliminate over the next decade, $3.3 trillion comes from programs that benefit low-income Americans: Medicaid, Pell Grants, food stamps, job training, school lunch, etc.

Seriously, school lunch. Evidently, Paul Ryan and Mitt Romney believe that the richest country in the history of the world can’t afford to provide its children with one decent meal a day.

Yet we can afford to pay the average millionaire an extra $265,000 per year. That’s how much more they’d earn if Ryan’s tax cuts became law.

Millionaires would get a raise of 12.5 percent on their after-tax income. The middle class would get a raise of less than 2 percent.

Is there an epidemic of suffering millionaires that I’m unaware of? Are they unable to pay their health insurance? Their student loans? Their mortgages?

No. Those are middle-class problems.

And they’ll become bigger problems if Ryan’s budget becomes law. Fewer Pell Grants will result in a lot more student debt, and less funding for the Affordable Care Act will rescind affordable health insurance for upwards of 30 million Americans.

Economists expect unemployment to remain high for several more years. Ryan’s solution is to fire thousands of federal employees.

Our veterans are suffering from record levels of post-traumatic stress disorder after multiple tours of duty in a war that most Americans no longer support. Ryan’s solution is to dishonor their sacrifice by skimping on their health care.

Income inequality has triggered protests in the streets and unsustainable household debt. Ryan’s solution is to pay the rich more and the poor less.

“If they can’t afford food or health care, let them die.” That should be Paul Ryan’s motto. Put that on your Mitt Romney bumper sticker.

And don’t think this is hyperbole, because they are dying. According to Harvard Medical School researchers, 45,000 Americans die every year because they lack health insurance and therefore cannot get the necessary care. According to researchers at Columbia University and the Federal Reserve, being unemployed for a year increases your odds of dying by 50 percent. Another year, and it’s 100 percent.

This is a cruel, cynical world we live in where hard-working men and women are tossed aside like road-kill for political gain.

“I’ve always resented the smug statements of politicians, media commentators, corporate executives who talked about how, in America, if you worked hard, you would become rich,” said the great historian Howard Zinn. “The meaning of that was: if you were poor, it was because you hadn’t worked hard enough. I knew this was a lie about my father and millions of others, men and women who worked harder than anyone.”

Indeed they did. This country was built on their broken backs. But Mitt Romney thinks they’re expendable — and when you go to the voting booth in November, he’s counting on you not to notice.