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Monday, 24 September 2012 10:07

Making $100,000 a Year? Romney Wants to Raise Your Taxes

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A little background first. President Obama has long battled with Republicans on the Hill in his attempt to preserve tax breaks on those families making $250,000 a year or less, while eliminating Bush tax cuts for the super rich.  

Enter stage right: Mitt Romney. He has been promoting an idea that he can cut every one's taxes including the top 1 percent (even more than the current Bush tax cuts), but hasn't provided details of how this can be done while reducing the deficit.

An article in The Washington Post by Ezra Klein, details Romney's sleight of hand in this paradoxical promise of cutting everyone's taxes, especially the ultra rich, while cutting national debt: he's lying.

To understand, Klein's analysis, you need to start with Romney's recent statement that someone who makes $250,000 is in the middle class (few would agree with him, but that's Romney's definition).  

Klein points out Romney's "do the math dilemma" on his tax cut plan on steroids:

Then, slowly, right-leaning economists and outlets began releasing their own studies showing that, if you made some really, really questionable assumptions, you could kinda sorta make Romney’s math look like it might add up. And so you might have heard Romney say this to David Gregory on “Meet the Press”:

    "The good news is that five different economic studies, [Romney said] including one at Harvard and Princeton and AEI and a couple at The Wall Street Journal all show that if we bring down our top rates and actually go across the board, bring down rates for everyone in America, but also limit deductions and exemptions for people at the high end, while you can keep the progressivity in the code, you could remain revenue neutral and you create an enormous incentive for growth in the economy."

So how would this be accomplished, according to one of the studies by a long-time Republican economic adviser and official, Martin Feldstein of Harvard?

Klein notes, with serious reservations about Feldstein's debt reduction assumptions:

And so, under really, really unrealistic assumptions, he shows that the math can kind of work, but that Romney’s policies would mean a really big tax increase for people making between $100,000 and $250,000 in order to pay for a big tax cut on people making more than $250,000….

And Romney has been all over the place trumpeting this study, saying this study shows his math works out. But then ABC’s George Stephanopoulos caught him out:

    GEORGE STEPHANOPOULOS: Is $100,000 middle income?

    MITT ROMNEY: No, middle income is $200,000 to $250,000 and less.

And here is where Klein gets to the crux of Romney's prestidigitation and tax betrayal of those who earn between $100,000 and $250,000:

So the study Romney is promoting — the one he says is the study you should be looking at — actually shows even under the most favorable assumptions possible, he’s going to have to raise taxes on the people he defines as the middle class. In saying that that study is credible, he has admitted he can’t make his tax promises add up. And yet he constantly, repeatedly says the opposite. (italics inserted)

So the people on the lower rungs of wealth are going to be taxed more to cut the tax liability of the top 1% or two.

And a lot of those lower wealth households will vote for Romney believing that he is going to cut their taxes, when he is counting on raising them.

Odd, that many such voters despise Obama as a "socialist" when it is Romney who is going to redistribute their income to the plutocracy above them.