The Glade 4.0

Lehrer is Masturbatin' Mal Reynolds?

In comic strips the person on the left always speaks first. - George Carlin

It's sad that you didn't even realize that my link was about Obama's thoughts on the debate last night and not about the idiot's commentary before the transcript. They have nothing to do with one another. You disregarding the Presiden't commentary because it was preceeded by someone's thoughts, regardless of where they were from, is one of the most biased POS things I've seen posted on this site.

It's sad that you didn't even realize that my link was about Obama's thoughts on the debate last night and not about the idiot's commentary before the transcript. They have nothing to do with one another. You disregarding the Presiden't commentary because it was preceeded by someone's thoughts, regardless of where they were from, is one of the most biased POS things I've seen posted on this site.

The legitimate debate is over whether the 20% rate reductions can be made and paid for with closing loop holes. There's studies that show it can be, and cannot be done, depending on the assumptions about growth, etc....Romney has stated repeatedly that he will not raise taxes on the middle class, and will not add to the deficit....

It says the same thing.

On the tax issue, the bolded part is where you're falling for the lie, AK. There are no studies that show you can have anything close to a revenue-neutral 20% rate cut without raising taxes on the middle class (by eliminating deductions the middle class uses) and/or increasing the deficit unless you assume a completely ridiculous level of growth that no reasonable economist thinks is remotely plausible. So yes, Romney is lying about his tax plan because he damn well knows it's not even close to possible in the real world.

It really doesn't. Emphasis - both in terms of how much you focus on a point and how strongly you word your statements - is relevant to communicative intent and thus, for an honest speaker at least, substantive meaning.

When you spend half your time hedging around your point, acknowledging the nuances of the issue and using mild language, you communicate a moderate view of the issue. Conversely, when you go directly and exclusively to your point, barely acknowledging any nuances or contrary views and using very strong language, you communicate a very immoderate view of the issue. If you're an honest speaker, you obviously try to communicate an accurate impression of your substantive views and therefore choose your emphasis accordingly.

At the debate, Romney backed into his point about excessive regulation, spent more than half his time acknowledging - indeed praising - the need for regulation, and used very mild language when ultimately making his point. Conversely, in his stump speeches, as reflected in that excerpt from his campaign website, he makes his point in a very one-sided, strongly-worded manner. He is thus communicating very different views of the issue - debate Romney says some regulation has become excessive and needs to be repealed and replaced because it is harming the economy; campaign Romney says there's a vast edifice of job-killing regulations that need to be torn down on day one of his presidency. The latter communicates a view that the problem is much more severe and far-reaching and requires a much more urgent and heavy-handed approach to solving it than does the former. Romney knows he's communicating very different messages about his views, and he is thus being a dishonest speaker.

"No reasonable economist supports the idea that a 20% rate cut can be paid for with closing of loopholes and deductions.. Anyone who does supports the idea of a ridiculous level of cuts. How do we know? Well, because believing this is totally unreasonable!"

Furthermore, calling it a "lie" is completely absurd. Going based on wrong models or predictions (assuming they are wrong) is not lying, it's being wrong. Going on unreasonable wrong predictions doesn't make you a liar, it makes you overoptomistic or unreasonable.

On the tax issue, the bolded part is where you're falling for the lie, AK. There are no studies that show you can have anything close to a revenue-neutral 20% rate cut without raising taxes on the middle class (by eliminating deductions the middle class uses) and/or increasing the deficit unless you assume a completely ridiculous level of growth that no economist thinks is remotely plausible. So yes, Romney is lying about his tax plan because he damn well knows it's not even close to possible in the real world.

Wait...didn't he just defend this exact statement?

Wonkblog’s comprehensive guide to the debate over Romney’s tax plan

Posted by Dylan Matthews on September 27, 2012 at 1:30 pm

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The Obama campaign citing the Tax Policy Center in an attack ad. / Obama for America

There’s no think tank report or academic study in recent memory that’s dominated a campaign the way the Tax Policy Center’s analysis of Mitt Romney’s tax plan has dominated this one.

The Obama campaign seized on TPC’s finding that Romney’s tax plan, even under very generous assumptions, raises taxes on the middle class, citing the paper in attack ads and stump speeches. The Romney campaign in turn dismissed the report, and numerous conservative economists and think tanks have written responses disputing its conclusions. The Heritage Foundation’s Curtis Dubay’s attempted debunking yesterday is just the latest.

It’s all a bit much for a technical report with the dry-as-bone title, “On the Distributional Effects of Base-Broadening Income Tax Reform.” So let’s take a step back. Given what the report actually said, have any of the studies responding to it debunked its conclusions? Not really. If anything, they highlight the priorities that Romney is going to have to compromise on to get tax reform done.

What the Tax Policy Center study actually said

The study started by noting that Mitt Romney has stated he wants his tax reforms to achieve (at least) five things:

A 20 percent reduction in marginal personal income tax rates.
Elimination of the estate tax.
Elimination of the Alternative Minimum Tax.
Enough base-broadening, through the elimination of tax expenditures, to fully pay for policies 1 through 3.
Preservation of incentives for saving and investment.

The paper then demonstrated that you can’t do 1-5 without raising taxes on people making under $200,000 a year. None of the responses to the study have disproven that. All either use a different definition of the middle class, rely on inappropriate estimates of growth caused by Romney’s plan, or else violate Romney’s promise to preserve the savings and investment incentives. Let’s go through the studies, one by one.

Feldstein: Depends on the definition of “middle class”

Martin Feldstein, a highly respected conservative economist at Harvard, found that you can complete all five without raising taxes on people making under $100,000 a year, but that to do so you’d need to raise them a lot on people making between $100-200,000. So Feldstein’s findings don’t really debunk the TPC study. Given that Romney has explicitly stated that people making between $100,000 and $200,000 are “middle income,” Feldstein’s study shows that Romney, by his own standards, would be violating his pledge to prevent a middle-class tax hike.

Rosen: What about growth?

Harvey Rosen, a public finance expert at Princeton, argued that the Romney tax plan will increase economic growth dramatically, which in turn would raise revenue and negate the need for tax increases on the middle-class. He finds that if the Romney plan increases economic growth by 3 percentage points relative to where it would be under current policies — a huge, and many economists think implausible, boost — then Romney’s numbers might work out. But behind his analysis lurk two assumptions that might not add up.

Rosen bases his growth estimates on a study of Romney’s plan done by Rice economist John Diamond. Diamond assumes that Romney’s plan is implemented under conditions of full employment. That’s important because it means that if you eliminate tax breaks for one industry and they have to fire workers, those workers can relatively easily find jobs in another industry. But barring a miraculous labor market recovery in the next few months, that won’t be the situation when Romney takes office. In the current world, wiping out tax breaks for an industry could lead to displaced workers who simply join the ranks of the unemployed, dragging down growth.

But more damaging for Rosen’s case is that Diamond’s study assumes that Romney’s plan is revenue-neutral before you take economic growth into account.* That is, Diamond assumes that the tax cuts have been fully paid for first, and that’s part of why they do so much for growth. Rosen, conversely, is making the case that you don’t need to fully pay for the tax cuts because growth will fill in the gap. So the Diamond-Romney tax plan and the Rosen-Romney tax plan are quite different, and growth estimates that apply to the first don’t necessarily apply to the second.

Jensen: TPC forgot about muni bonds and life insurance

Another set of criticisms notes that you can satisfy Romney’s first four policy priorities and not raise taxes on those making under $200,000 if you sacrifice the fifth one: preserving incentives for savings and investment. Matt Jensen at AEI points out that two saving incentives that TPC rules off the table — to whit, the exemptions for state and local bonds and for interest on life insurance savings — disproportionately help high earners. If you eliminate them, then at the very least the Romney plan’s hit to middle class taxpayers is lessened.

But as the TPC study authors pointed out in a follow-up paper, eliminating those exemptions cuts the tax hike on people making $200,000 in half, but their taxes still go up. So even if you relax Romney’s fifth goal, a tax hike on the middle class could still be required.

Dubay: The estate tax changes things

That brings us to the Heritage Foundation’s response, written by Curtis Dubay. Dubay argues that TPC misestimated the revenue effects of eliminating the estate tax. Dubay argues that eliminating the tax will likely be paired with a move to “carryover basis” capital taxation. Under that system, inherited goods that are then sold would be taxed based on their value upon initial purchase, rather than upon being inherited.

For example, imagine your grandfather bought a Jackson Pollock painting, back before Pollock hit it big, for $50. When your grandfather dies and leaves you the painting, it’s worth $10 million. You decide to sell the painting for $25 million. Under the current law (called “step basis”), you’d pay taxes on the $15 million difference between the price when you inherited it and the price when you sold it. Under carryover basis, you’d pay taxes on the $24,999,950 difference between the price your grandfather bought it at and the price you sold it at. So carryover basis raises more revenue.

But as Suzy noted, Dubay’s estimates for exactly how much revenue it raises are flawed. His numbers compare the current “step basis” policy not to carryover basis, but to a policy in which all assets are taxed at capital gains rate when someone dies. That’s a much more dramatic change than carryover basis, and likely to raise much more revenue. So Dubay’s revenue estimates are considerably too high. And the less revenue gained from the carryover basis change, the bigger tax the hikes on middle-class people to make things balance out.

And in any case, the policy Dubay highlights, like the ones Jensen highlights, is a savings incentive. So Romney has to abandon one of his tax policy commitments to implement them.

So Romney has to give something up for his plan to work. He can give up defining the middle class as those making under $200,000. He can give up preserving savings incentives. He could also sacrifice on rate cuts, as his advisor Kevin Hassett has implied he might.

Ezra asked the Romney campaign whether Hasset was speaking for Romney when he said the governor would sooner give up his tax cuts than increase the deficit, if it came to that. The Romney campaign’s answer: “The Governor’s plan calls for a 20% rate cut for all brackets, revenue neutrality, while ensuring that high-income earners continue to pay at least the same share of taxes. All of these goals are achievable, and the Governor will work with Congress to enact tax reform that meets each of the goals he has proposed.”

That aside, TPC’s conclusion holds up. Romney can’t get everything he wants. So the question is what he’ll give up.

Tax plans aren’t just about math

It’s worth emphasizing just how low a bar the Romney plan is being asked to clear. The question the Tax Policy Center asked was whether it’s mathematically possible to do all the things Romney says he wants to do. But even if it were mathematically possible, it may not be politically possible or substantively wise.

All of the above analyses assume that Romney totally eliminates the charitable deduction, mortgage-interest deduction, all education tax breaks, all state and local tax deductions the employer-provided health care exemption, all Health Savings Account and medical expenses deductions, and more for people making over $200,000. Even if TPC is wrong, you’d probably have to limit them for people making under that amount too, so middle-class people pay the same amount when you take into account the rate cuts.

These are enormous changes. Eliminating the charitable deduction for the rich could effectively wipe out funding for thousands of charitable, artistic, and educational institutions. Small theaters could shut down. Anti-malaria groups would buy fewer bednets. Private colleges would lose donations, and hike up tuition to make up the difference, even as tuition deductions and credits are eliminated. In 2009, when President Obama proposed simply limiting the charitable deduction at the to end, Martin Feldstein, author of the first study trying to show Romney’s plan could work, wrote, “in effect, the change would be a tax on the charities, reducing their receipts by a dollar for every dollar of extra revenue the government collects. It is hard to imagine a rationale for taxing schools, hospitals, medical research budgets and arts organizations in this way.”

Eliminating the mortgage-interest deduction would upend the housing sector, reducing demand to buy dramatically and shifting the sector toward renting. Eliminating the employer health exemption could mark the beginning of the end of the employer-based health system as we know it.

Perhaps these are good ideas. Many countries’ tax codes are less tolerant of charitable contributions than the US and make up for that with direct artistic and educational subsidies. The mortgage-interest deduction arguably fueled the housing bubble. The employer-based health care system keeps people from moving freely between jobs, and ending the exemption that keeps it in place could do a lot of good. But these aren’t just technical changes. They’re transformative shifts in American public policy. And the debate over whether they would make Romney’s plan possible has obscured the debate over whether they’re a good idea, or likely to happen.

Wait...didn't he just defend this exact statement?

Fair enough. Allow me to rephrase: It's true that some economists believe the pro-growth effects of a 20% rate cut would outweigh the anti-growth effects of eliminating deductions to a sufficient degree that the net effect would be a substantial increase in overall growth large enough to offset the reductions in baseline revenue. However, most economists who have studied the issue believe growth of that magnitude is very unlikely and have thus concluded that Romney's plan is unlikely to be revenue-neutral unless taxes paid by the middle class increase.

See - my more moderate phrasing and acknowledgment of nuance indicates a shift from complete rejection of the opposing view to a recognition that there is at least some disagreement over the point.

I disagree. If you know an assumption is unreasonable, or at least highly unlikely, but you make your pitch anyway without acknowledging that, I think you're being dishonest.

I figure most of his base doesn't look kindly on evolution.

Thanks, Arathain. I enjoyed the Rosen paper and that WaPo article. I did a bunch of googling myself, and, other than the fact that the pro-Romney analyses used 2009 numbers as a baseline (i.e. the bottom of the recession and thus the most favorable for their guy mathematically), that WaPo article basically hits all the same points I spent the last hour digging up.

I disagree on whether Romney's being dishonest though. He's stated that "middle class" means under $200k and that the mortgage, health insurance and charitable deductions won't be eliminated, so even the pro-Romney analyses fail to back him up on the math given those parameters. And like the WaPo piece noted, there's a big jump between mathematically possible and politically possible, let alone substantively wise.

Thus, my view is that Romney knows his plan doesn't really work on paper unless you make a number of rosy assumptions and ignore some of his own statements about it, and more than that, he knows for an absolute fact that there's no way he'd ever be politically able to implement his plan and almost certainly wouldn't even try given the damage it would do to his re-election prospects, so by pretending otherwise, he's being dishonest about what his actual policy will be once he's in office.

I figure most of his base doesn't look kindly on evolution.

Thanks, Arathain. I enjoyed the Rosen paper and that WaPo article. I did a bunch of googling myself, and, other than the fact that the pro-Romney analyses used 2009 numbers as a baseline (i.e. the bottom of the recession and thus the most favorable for their guy mathematically), that WaPo article basically hits all the same points I spent the last hour digging up.

I disagree on whether Romney's being dishonest though. He's stated that "middle class" means under $200k and that the mortgage, health insurance and charitable deductions won't be eliminated, so even the pro-Romney analyses fail to back him up on the math given those parameters. And like the WaPo piece noted, there's a big jump between mathematically possible and politically possible, let alone substantively wise.

Thus, my view is that Romney knows his plan doesn't really work on paper unless you make a number of rosy assumptions and ignore some of his own statements about it, and more than that, he knows for an absolute fact that there's no way he'd ever be politically able to implement his plan and almost certainly wouldn't even try given the damage it would do to his re-election prospects, so by pretending otherwise, he's being dishonest about what his actual policy will be once he's in office.

I always get annoyed by obviously incorrect off-the-cuff snarky comments like this. So, I took a quick trip to Google to get the actual percentage of people who believe in creationism. Now I am a sad panda.