Mitt Romney sat for an interview on Meet the Press Sunday, and the Republican presidential candidate again didn’t fill in the blanks on his plan to restart the economy.
The problem came down, once again, to taxes. Specifically Romney’s plan relies on tax cuts to generate the growth the economy will need to produce the 12 million jobs he says it will create by the end of his first term. Those include a cut in the top business tax rate paid to 25% from 35% and slashing individuals’ marginal rates by 20% beyond those under the Bush tax cuts.
Here’s moderator David Gregory:
In addition to extending the Bush tax cuts, you want to cut tax rates an additional 20%. You’ve rejected a ten-to-one ratio when it comes to spending to increasing taxes. And, yet, you want to balance the budget. The math simply doesn’t add up, does it?
Romney, citing highly partisan studies produced by conservative economists, said that “actually it does.” Then he explained:
If we…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…
We’re not going to have high-income people pay less of the tax burden than they pay today. That’s not what’s going to happen. I do want to bring taxes down for middle income people. In particular, I want middle income Americans not to have to pay taxes on interest and dividends and capital gains.
Gregory pressed him to name some loopholes he would close or exemptions he would end to bring in new revenues. Romney didn’t take the bait, but reiterated:
Well, I can tell you that people at the high end, high income taxpayers, are going to have fewer deductions and exemptions. Those– those numbers are going to come down. Otherwise, they’d get a tax break… But we encourage small business, because small business is able to keep more of what it makes and. therefore hire more people, which is my priority.
There are two problems here. As I wrote in my column last week, counting on tax cuts and ending regulatory red tape to create more private sector jobs than in any president’s terms since 1939 is a fantasy.
And there’s no way it could balance the budget unless Congress repeals the major deductions and exemptions many Americans rely on—deductions for mortgage interest, state and local taxes, and charitable contributions, as well as the earned income credit and other tax benefits. These also are some of the toughest things to accomplish politically, with rich, powerful lobbies defending them to the death.
So, by throwing in these extra tax cuts to opportunistically appease the Club for Growth right during primary season, Romney probably blew his chance to balance the budget. But that’s not what he claimed Sunday:
I’ll balance the budget by the end of my second term. The steps I’ve put in place and we’ve put together a plan that lays out how we get to a balanced budget within eight to 10 years.
Eight to ten years? That would be after he left the office. And it would mean somehow filling a $6-7 trillion loss in revenue through keeping the Bush tax cuts and adding his own.
Again, no matter how many times he says it, it just doesn’t add up.