A Taxing Problem for Romney Supporters

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Tuesday morning, on Bloomberg, one of Mitt Romney’s financial advisers said they were looking at raising the tax rates or eliminating deductions for the wealthiest of Americans – those making over $200k or $250k on up.  Now, It seems to me, that, when Barack Obama made the same proposal, there was weeping, wailing, and gnashing of teeth as all Hades broke lose.

NOTE:  Scroll down to the end of the post for a little music while you read.

“…Romney proposes eliminating the capital gains tax for only those with less than $200,000 in taxable income. That has been criticized in GOP circles as timid. Other Republican White House hopefuls, meanwhile, called for striking the entire tax. The Ryan budget does not include Romney’s $200,000 provision….”

Let me tell you how it will be
There’s one for you, nineteen for me
‘Cause I’m the taxman, yeah, I’m the taxman

Should five per cent appear too small
Be thankful I don’t take it all
‘Cause I’m the taxman, yeah I’m the taxman

If you drive a car, I’ll tax the street,
If you try to sit, I’ll tax your seat.
If you get too cold I’ll tax the heat,
If you take a walk, I’ll tax your feet.

Don’t ask me what I want it for
If you don’t want to pay some more
‘Cause I’m the taxman, yeah, I’m the taxman

Now my advice for those who die
Declare the pennies on your eyes
‘Cause I’m the taxman, yeah, I’m the taxman
And you’re working for no one but me.
George Harrison
Up until the primaries began, Rush and I were not seeing a lot of things eye to eye.  I guess we’ve both gone back to our roots.  I don’t know if it’s good or bad that I’m agreeing with him quite a bit.  I do know that what I heard this morning left a very bitter taste in my mouth.

Rush Limbaugh

This is the liberal version of things.  It’s the end of the world as we know it, but then that’s how liberals look at tax cuts.  The real problem here is that Romney has a history of not keeping promises, and raising taxes.  I am well aware that Ronald Reagan had to make bitter choices when governor, but he had a spine of stone, and would not back down on anything.  We knew exactly what he believed.  We knew what GWB believed.  We don’t know what this man believes.

What Romney is proposing is class warfare.

“...Folks, look, what I don’t understand from Romney is why class warfare, and it’s what it is. If you’re gonna start emulating the Democrats on we’re gonna have a different set of rules for the rich, then you’re pandering. It’s populism. You’re emulating the class warfare of Obama of the Democrats. And it’s not necessary. Why not eliminate everybody’s deductions? Go and have different tax rates if you want, but eliminate everybody’s deductions. If we’re gonna eliminate some people’s deductions, why not everybody’s? The other side gets into that game of class warfare. All this does is sort of concede that the Democrats are right about this, treating people differently when it comes to freedom and liberty and economic opportunity and so forth. We should be for equal protection under the law — even in the tax code….”

Daily Kos

“...Mr. Romney has pledged a 20% cut to income tax rates for taxpayers in all income brackets but has offered few details for how he would pay for the proposal. Mr. Romney also has vowed to bring federal spending under control, while offering few details on which programs he would cut.

President Barack Obama recently criticized Republicans on the point, saying they hadn’t specified which programs they would pare back.

“I’m going to probably eliminate for high-income people the second-home mortgage deduction,” Mr. Romney told supporters at the event Sunday. His plans could allow him to keep the same level of tax revenue but to lower rates, which he said would allow small businesses to keep a larger share of their earnings and expand their payrolls.

Mr. Romney previously has said he would cut or limit deductions for high-earners but hadn’t offered specifics. Some previously announced elements of his tax plan target their benefits to middle-income people, such as his proposal to eliminate capital gains taxes for taxpayers with adjusted gross income of less than $200,000 a year.

On Sunday, Mr. Romney said he would look to the education department and HUD for potential cuts. “That might not be around later,” Mr. Romney said of HUD.

Mr. Romney said he would either consolidate the education department with another agency or make it “a heck of a lot smaller.” “I’m not going to get rid of it entirely,” he said.

He also vowed to stand up to teachers unions and warned that unions would funnel dues to Mr. Obama’s reelection campaign. “The unions will put in hundreds of millions of dollars,” Mr. Romney said. “There’s nothing like it on our side,” he said, and he encouraged attendees to get their friends to donate, as well….”

New Mexico would be slammed if Romney were to raise taxes.  Sure, it’s a cheap shot, but when a man wants to do what amounts to raising taxes in a very poor state, while he pays 15%, well, it looks really bad.

“...But significantly—and here’s the political risk—many swing states would be affected, including Colorado, Iowa, New Mexico, North Carolina, Ohio, Pennsylvania, and Virginia.

The Romney camp would be quick to counter that his plan for an across-the-board tax cut would more than offset these lost deductions, but the idea of eliminating the local tax deduction gives Team Obama new argumentative ammunition in its courting of the middle class.

In general, I think politicians should be applauded when they offer details about their tax plans—especially because tax reform is an area where we should be able to get action from the next Congress, no matter who is president. And even as ambitious a plan as Paul Ryan’s did not offer details about the specific tax loopholes that would be closed to pay for lower rates for fear of alienating individuals and special interests.

On this Tax Day, these debates also illustrate the double level of debates going on about taxes. We often get suckered into thinking tax debates are about simple rates—for example the current top rate of 35 percent versus the Clinton era 39.6 percent. But what’s more significant is the effective rate, which helps explain how Romney pays 14 percent and President Obama just over 20 percent. Deductions for state and local taxes are an important feature for people living in higher-tax states, and losing those could mean a tax increase on their bottom line….”

I was listening to the interview on Bloomberg, with one of Romney’s financial advisers.  I’m sorry, but I agree with John Stack.  Some of Romney’s ideas, or his team’s ideas are just plain strange.  They almost show a disconnect with reality.

Adirondack Daily Enterprise

I am trying to be honest here.  At one time Romney did put out a detailed plan (economic), but was slammed for it.  I liked the op-ed.  Then again, at the time it was written, I was supporting Romney.

“…First, President Obama has raised or threatened to raise taxes on both individuals and businesses. I would press hard in the opposite direction. Marginal income tax rates and tax rates on savings and investment must be kept low. Further, taxes on interest, dividends and capital gains for middle-income taxpayers should be eliminated. Our corporate tax rate is among the world’s highest. It leaves U.S. firms at a competitive disadvantage and induces them to park their profits abroad, benefiting the rest of the world at our expense. I will fix these problems with permanent solutions. Ultimately, I will press for a total overhaul of our overly complex and inefficient system of taxation….”

This leaves a dirty taste in my mouth.

If Romney is paying either the 14% or 15% as is reported, why not lower everyone’s rates to that amount and do away with deductions?  Now that would be fair.  The problem is it is far too easy.  Politicians don’t want easy solutions.  Just think what would happen if you did an across the board 12% income tax, capital gains, and death tax.  This country would explode with growth.

Nah, that’s too simple.

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