Obama's $5T Statement

[therealUT]

For anyone interested, Obama cited a study of Romney's "tax plan" by the Tax Policy Center, that comes to the conclusion that the plan will reduce tax revenues by $5T over 10 years. Romney, as everyone noticed last night, vehemently rejects Obama's assertion.

Maybe it hinges on the following:

We make the following assumptions:

Any reductions in revenue due to the lower corporate rate would be offset by reducing corporate tax preferences. As a result, we examine only changes to the individual income tax, alternative minimum tax, payroll tax, and estate tax. We ignore the effect of the proposal to reduce the corporate rate to 25 percent.

Tax Reform

In other words, the study is absolute garbage.

 

[tim]

Yep, but expect to hear this garbage for the next 33 days.

 

[azVolFan]

For anyone interested, Obama cited a study of Romney's "tax plan" by the Tax Policy Center, that comes to the conclusion that the plan will reduce tax revenues by $5T over 10 years. Romney, as everyone noticed last night, vehemently rejects Obama's assertion.

Maybe it hinges on the following:


In other words, the study is absolute garbage.

You had a doubt?

 

[lawgator1]

What is the effect of reducing the corporate rate to 25%?

I mean, if you believe Team Romney, it will create jobs and therefore more revenue.

If you believe Team Obama, it just makes the rich richer.

The investment class and big corporations have plenty to spend on hiring and building right now. The key is not to free up more capital for them to sit on. The key is to spur demand so that they do it on their own.

 

[volinbham]

What is the effect of reducing the corporate rate to 25%?

I mean, if you believe Team Romney, it will create jobs and therefore more revenue.

If you believe Team Obama, it just makes the rich richer.

The investment class and big corporations have plenty to spend on hiring and building right now. The key is not to free up more capital for them to sit on. The key is to spur demand so that they do it on their own.

Actually Obama is proposing a corporate tax rate reduction too. Does he just want to make the rich richer?

 

[lawgator1]

Actually Obama is proposing a corporate tax rate reduction too. Does he just want to make the rich richer?

With more closure of loopholes so that they actually pay it.

Query: which one has a plan that will actually result in more tax revenue coming in from corporations, as opposed to just playing with rates and loopholes? Which one is more net dollars coming in?

 

[therealUT]

What is the effect of reducing the corporate rate to 25%?

I mean, if you believe Team Romney, it will create jobs and therefore more revenue.

If you believe Team Obama, it just makes the rich richer.

The investment class and big corporations have plenty to spend on hiring and building right now. The key is not to free up more capital for them to sit on. The key is to spur demand so that they do it on their own.

The investment class and big corporations are terrified of expanding and investing capital in America right now. Between rising costs (taxes) associated with healthcare, the thousands of EPA regulations that have been placed on the books in the past four years, and corporate income tax rates that top off at 39% (not including state income tax rates), why would anyone do anything other than opening up shop outside the US or holding onto their money right now?

Again, Romney's principles appear to be more than simply lowering the corporate income tax rate (although that is huge); they appear to be focused removing disincentives to production (thus, he was very forward about getting back to mining a lot of coal in this country, etc.)

I have no doubts that Romney would admit that if all the BS regulation remains in place, nothing he does to the corporate income tax is going to make it attractive to produce in America. If that is your point, then it is made.

 

[volinbham]

With more closure of loopholes so that they actually pay it.

Query: which one has a plan that will actually result in more tax revenue coming in from corporations, as opposed to just playing with rates and loopholes? Which one is more net dollars coming in?

Both are proposing lower rate with less loopholes.

Hard to say which since neither has provided more details than the other. They are pretty much the same so far on this part of the tax plan.

 

[KingNick865]

I was watching something on CNN about this after the debate. They pretty much said that what Obama said was false because Romney's tax plan has not been spelled out yet in a way that the numbers could be checked.

 

[lawgator1]

I was watching something on CNN about this after the debate. They pretty much said that what Obama said was false because Romney's tax plan has not been spelled out yet in a way that the numbers could be checked.

Who does that make you distrust more?

 

[BigPapaVol]

Who does that make you distrust more?

seriously? one blatantly made something up and the other didn't hand out his full policy, knowing full well that Axelrod's plan is to goad it out of him to be pilloried absurdly by lefty outlets incapable of allowing reasoned debate.

 

[azVolFan]

Who does that make you distrust more?

Romney should shut his campaign down to work on the details of his tax plan? And that's going to get the undecided voter to vote for him? Brilliant. You should find where he's at today and present this awesome idea to him.

 

[VolsNSkinsFan]

Who does that make you distrust more?

the guy who said he was going to cut the deficit in half but actually doubled it 4 years later

 

[lawgator1]

seriously? one blatantly made something up and the other didn't hand out his full policy, knowing full well that Axelrod's plan is to goad it out of him to be pilloried absurdly by lefty outlets incapable of allowing reasoned debate.

Obama bases his claim on the TPC number crunching which is based on what Romney has released so far in terms of detail.

Obama says the study shows ..... And it does.

Romney says the study is wrong, but won't say why, and won't release the details necessary to test his claim that the study is wrong.

I'd say Romney easily comes out on the short end of the stick. I mean, its his proposal.

 

[BigPapaVol]

Obama bases his claim on the TPC number crunching which is based on what Romney has released so far in terms of detail.

Obama says the study shows ..... And it does.

Romney says the study is wrong, but won't say why, and won't release the details necessary to test his claim that the study is wrong.

I'd say Romney easily comes out on the short end of the stick. I mean, its his proposal.

If Obama doesn't know that the TPC crunching is like asking my 3rd grade son to give him answers, he should avoid the topic.

Obama is an idiot and it should be made clear. I could say "some people say..." and it would be exactly equivalent.

The study said enough to make clear it's wrong, but nobody reads it.

Romney is the lone guy in the conversation who hasn't said anything materially incorrect or misleading.

 

[therealUT]

Obama bases his claim on the TPC number crunching which is based on what Romney has released so far in terms of detail.

Obama says the study shows ..... And it does.

Romney says the study is wrong, but won't say why, and won't release the details necessary to test his claim that the study is wrong.

I'd say Romney easily comes out on the short end of the stick. I mean, its his proposal.

There have been other institutes that have, in detail, shown why the study is significantly flawed.

Hell, I provided an example from just looking at the first page of the study. The Heritage Foundation has a very thorough analysis of the methodology and choices made in the study. Do you want Romney to go through that point-by-point in the debate?

 

[KingNick865]

Who does that make you distrust more?

I think it all depends on where you're standing. For me, I wish Romney would release more details on his tax plan. I mean, I'd never vote for the guy to start with, but I'd at least like to be able to see what kind of vision he has for taxation going forwards if he manages to get elected.

 

[BigPapaVol]

I think it all depends on where you're standing. For me, I wish Romney would release more details on his tax plan. I mean, I'd never vote for the guy to start with, but I'd at least like to be able to see what kind of vision he has for taxation going forwards if he manages to get elected.

you're exactly why he shouldn't release them.

 

[KingNick865]

you're exactly why he shouldn't release them.

Someone who wishes to know what someone would do if they are elected to the office of President?

I understand the fear that his campaign has about all of this. However, would it not hurt him more if Obama is the one framing the discussion about his tax plan, or lack thereof?

 

[therealUT]

I think it all depends on where you're standing. For me, I wish Romney would release more details on his tax plan. I mean, I'd never vote for the guy to start with, but I'd at least like to be able to see what kind of vision he has for taxation going forwards if he manages to get elected.

I imagine that you could simply read Adam Smith and Milton Friedman and come to a pretty good idea of what Romney believes about taxes and economics. But, Smith and Friedman never lay out specific tax plans and codes for governments to adopt; they lay out principles that must be adhered to in order to maintain a healthy economy.

Basically, I imagine that you can take Romney's principles to be somewhat as follows (and, yes, there will be exceptions...read defense spending and medicare):

1. As a government do not spend more than you take in; if you must, do so at a low interest rate and do your best to leverage the debt. Do not borrow to pay off previous borrowing.

2. The more individuals that are paying taxes, the higher sustainable revenues will be. Sustainable is the key word here. The system must be self-sufficient and you cannot do that by simply imposing exorbitant taxes on the wealthy (their money will search for less costly systems and find a way to leave your system). Further, in order to ensure that more individuals are paying taxes you must ensure that more individuals have jobs; specifically, jobs in which they are not getting paid with tax money (else, it is simply circular, which is not sustainable).

3. Revenue collection must be fair. If revenue collection is not fair, it will breed resentment. Resentment, being a powerful emotion, often overcomes reason and individuals will place their money elsewhere, even at a greater cost to them, rather than give it to the system that is treating them unfairly.

4. Spending must not only be for effective and efficient programs, but these programs also appear to be, on the surface, effective and efficient. Individuals do not like to have their money taken from them for programs they view as useless and/or ill-managed. Doing so breeds resentment. See (3).

These systems can obviously be neglected in certain circumstances. The two most obvious circumstances are (1) places in which there exists no relative scarcity of a major commodity (UAE, Kuwait, Saudi, etc.); and, (2) nations which are ruled under a highly repressive and authoritarian government that is very effective at coercion.

 

[lawgator1]

There have been other institutes that have, in detail, shown why the study is significantly flawed.

Hell, I provided an example from just looking at the first page of the study. The Heritage Foundation has a very thorough analysis of the methodology and choices made in the study. Do you want Romney to go through that point-by-point in the debate?

The Heritage Foundation is going to be about the least responsible or unbiased organization I'd quote on this. Might as well quote an ACORN study about Obama's plan.

Its Romney's plan, an organization with a Dem and a Repub at the helm say they cannot see a way that it can be revenue neutral without raising taxes on the middle class, and by a lot, and the response from Romney and the GOP is simple:

"No, it doesn't."

I'm sorry, I need a little more than that.

 

[utvolpj]

Its Romney's plan, an organization with a Dem and a Repub at the helm say they cannot see a way that it can be revenue neutral without raising taxes on the middle class,

you should actually read the OP. It's not the only thing they ignored

I'm sorry, I need a little more than that.

yet you're voting for a Pres who has consistently added twice that. How is that possible?

 

[KingNick865]

I imagine that you could simply read Adam Smith and Milton Friedman and come to a pretty good idea of what Romney believes about taxes and economics. But, Smith and Friedman never lay out specific tax plans and codes for governments to adopt; they lay out principles that must be adhered to in order to maintain a healthy economy.

Basically, I imagine that you can take Romney's principles to be somewhat as follows (and, yes, there will be exceptions...read defense spending and medicare):

1. As a government do not spend more than you take in; if you must, do so at a low interest rate and do your best to leverage the debt. Do not borrow to pay off previous borrowing.

2. The more individuals that are paying taxes, the higher sustainable revenues will be. Sustainable is the key word here. The system must be self-sufficient and you cannot do that by simply imposing exorbitant taxes on the wealthy (their money will search for less costly systems and find a way to leave your system). Further, in order to ensure that more individuals are paying taxes you must ensure that more individuals have jobs; specifically, jobs in which they are not getting paid with tax money (else, it is simply circular, which is not sustainable).

3. Revenue collection must be fair. If revenue collection is not fair, it will breed resentment. Resentment, being a powerful emotion, often overcomes reason and individuals will place their money elsewhere, even at a greater cost to them, rather than give it to the system that is treating them unfairly.

4. Spending must not only be for effective and efficient programs, but these programs also appear to be, on the surface, effective and efficient. Individuals do not like to have their money taken from them for programs they view as useless and/or ill-managed. Doing so breeds resentment. See (3).

These systems can obviously be neglected in certain circumstances. The two most obvious circumstances are (1) places in which there exists no relative scarcity of a major commodity (UAE, Kuwait, Saudi, etc.); and, (2) nations which are ruled under a highly repressive and authoritarian government that is very effective at coercion.

This seems like a reasonable assertion and analysis of any plan that Romney would put out. Here's the issue I have though. Romney will most likely cut taxes and (at least attempt) to cut spending. However, would any of this be "fair" in the sense that he would cut things that would be both painful for liberals and conservatives alike (i.e. - social security or welfare funding for liberals, and defense spending for conservatives)? My instinct says no, any cuts to welfare would not be followed up with any cut to defense (I do believe you did address that in your main prompt though).

 

[azVolFan]

This seems like a reasonable assertion and analysis of any plan that Romney would put out. Here's the issue I have though. Romney will most likely cut taxes and (at least attempt) to cut spending. However, would any of this be "fair" in the sense that he would cut things that would be both painful for liberals and conservatives alike (i.e. - social security or welfare funding for liberals, and defense spending for conservatives)? My instinct says no, any cuts to welfare would not be followed up with any cut to defense (I do believe you did address that in your main prompt though).

There are plenty of rich liberals and poor conservatives so "taxing the rich" doesn't mean taxing conservatives and "cutting entitlements" doesn't mean taking money from liberals.

 

[lawgator1]

yet you're voting for a Pres who has consistently added twice that. How is that possible?

No, I'm questioning whether Romney's main justification for electing him has any merit. Again, seems to me that fiscal conservatives would be concerned about the effects on the deficit of a proposal to reduce taxes and increase spending.

I still can;t get over the fact that so many seem willing to just "accept" Romney's claim that it won't increase the deficit when, based on what he has released about it, it simply mathematically has to.