Ryan’s six studies backing up Romney’s tax plan turn out not to be six studies


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Republican U.S. Presidential candidate Mitt Romney (L) introduces U.S. Congressman Paul Ryan (R-WI) as his vice-presidential running mate during a campaign event at the retired battleship USS Wisconsin in Norfolk, Virginia, August 11, 2012.  REUTERS/Jason

Just say “six studies” and everyone will go “wow!”

While being pummeled on his ticket’s tax plans in the debate Thursday night, Congressman Paul Ryan told Vice President Joe Biden that there are the six studies that back up the proposal to cut taxes and close loopholes in a revenue-neutral way.

I don’t know about you, but when I hear the term “study,” and especially “tax study,” I picture a 15- or 40- or 100-page document, bound in metal rings or in the pdf format, and filled with charts and tables and footnotes. I don’t think of op-eds in The Wall Street Journal or blog posts. Nothing against either, you understand. I used to make a living editing and writing for op-ed pages and I now make one as a blogger. But I’d be rotflmao at myself if I ever referred to this work as “studies.”

Yet that is exactly the mischaracterization Ryan gave to three blog-posts, one op-ed and one Romney campaign white paper. Although its author calls it a “working paper,” one of the studies, a 15-page document by Harvey S. Rosen at Princeton University’s Griswold Center for Economic Policy Studies, actually qualifies for the term. Not that it makes a good case. But at least it actually can be considered an honest-to-goodness study of the Romney (Ryan) plan.

The other five “studies” are analyses or sheer propaganda and riddled with problems.

The controversy arose when The Tax Policy Center published a paper Aug. 1 saying the Romney plan was a no-go because the rate cuts the candidate was proposing would provide $86 billion more tax givebacks for people earning $200,000 or more than would be covered by eliminating tax expenditures for that tier of Americans. TPC said that to keep from boosting the deficit, as he promised not to do, he would have to raise taxes, significantly, on the middle class, something he also promised not to do.

The inadequacies of the plan flashed around the media and blogosphere. But Thursday night Ryan tried to tart it up with those six-studies-credentials.

Matthew O’Brien at The Atlantic has a succinct, linked overview of the study and five analyses, taking them apart in a paragraph each. Ultimately, he writes:

Romney’s plan only works if you assume he has a different plan or use a magic growth asterisk. And that means we have no idea what he would do if he wins. Does he care more about his tax rate cuts, about not hiking taxes on the middle class, or not increasing the deficit? His adviser Kevin Hassett suggested they would back off the high-end tax rate cuts if it would increase the deficit, but Romney quickly denied that. He’s also denied reality, by relying on studies that only prove his critics’ point.

Economist Josh Barro, hardly a liberal, has been hammering away on Romney’s economic plan since exactly a year ago when he suggested for the first time that perhaps Romney had something secret in mind for the economy because the candidate’s 160-page proposal with its 59 bullet points didn’t provide the right prescription in spite of all its verbiage.

A year later, on Friday, Barro had the most thorough smackdown of the six “studies.” He dissected them with scalpel and ax.

Here is what he wrote about an op-ed and blog post by Martin Feldstein:

Feldstein ran the numbers and said Romney can cut tax rates by 20 percent and eliminate enough tax expenditures to balance the budget without raising taxes on the middle class. But Feldstein defines “middle class” differently than Romney does.

Feldstein allows for tax increases on people making more than $100,000. But on Sept. 14, Romney told ABC’s George Stephanopoulos that he would hold people making less than $200,000 or $250,000 harmless from tax increases.

The Romney campaign, therefore, is dishonest in saying Feldstein’s analyses “confirm the soundness” of Romney’s tax plan. Feldstein is analyzing a different tax plan, which would allow tax increases on taxpayers making between $100,000 and $200,000. That’s a large group, accounting for 24 percent of all adjusted gross income in 2009. But it’s a group Romney has pledged not to touch.

The trouble with such analyses-of-the-analyses is that they pretty much accept the terms of discussion as set forth by the campaign and centrist or center-right economists in general. That’s a narrow band. For progressives, critiques ought to go further, including the ideas of the Modern Monetary Theorists and others who want something fresh that soars beyond the conventional thought of economists who merely reject the perspective of the Right.

We know Mitt Romney and Paul Ryan’s plans are retrograde blueprints for returning us to the halcyon days of the Gilded Age. Ditching those is a no-brainer. But we need a lot more discussion from more diverse perspectives of what we think a truly progressive economy—an environmentally sustainable, financially equitable and dynamic economy—would look like. And of how we get there.


Think tank that proved Romney’s tax plan doesn’t add up now gets Romney campaign seal of approval


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$251 billion - $165 billion = $86 billion tax cut

The group cited by Romney’s campaign today proved that unless you assume tax cuts magically grow the economy, Romney’s numbers don’t add up.

I’m beginning to think that the only thing Mitt Romney has against Etch A Sketches is that he thinks Etch A Sketches are too darn permanent. His campaign’s latest change of heart:

In a press release today, the Romney campaign cites an article that ran in The Hill prominently citing the non-partisan think tank the Tax Policy Center to hit President Obama on how his policies have effected farmers. The Romney campaign, as recently as Sunday, was calling the Center “a liberal think tank” for saying Romney’s tax plan would increase have to increase taxes on lower and middle income people to pay for his plan.

The excerpt of the report distributed by the Romney campaign describes the Tax Policy Center as “non-partisan,” which is entirely accurate. They are an independent organization and their analysis conclusively demonstrated that Romney’s tax plan math doesn’t add up—unless you assume that cutting taxes would create so much economic growth that the tax cuts would pay for themselves. That’s the same trickle-down theory that George W. Bush used to wreck our economy after the Clinton boom, and it’s the same theory that Mitt Romney endorsed in last week’s debate. And it’s got about as much chance of working as Romney does of being able to keep his story straight on any given topic from one moment to the next.


Four of Romney’s big debate lies in one video


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The Obama campaign is highlighting Mitt Romney’s debate lies in a web video. Given the volume of untruth we’re talking about, a two-minute video can only skim the surface, but running through the big lies is brutal enough (shoot, the ad released Thursday that only touched on tax policy was pretty hard-hitting itself). So what are the big lies, the topline lies, the campaign is identifying?

He didn’t tell the truth about his tax plan.

He didn’t tell the truth about his plan for Americans with pre-existing conditions.

And didn’t tell the truth about his plans for Medicareor the president’s.

Why would Romney not tell the truth about what he’d do as president?

Because his real plans would hurt the middle class.


Personal taxes aside, Romney’s wealth built on Bain’s offshore tax avoidance


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U.S. Republican presidential candidate and former Massachusetts Governor Mitt Romney gestures while making a point about children's education at The Latino Coalition during the Annual Economic Summit at the U.S. Chamber of Commerce in Washington, May 23,

Relatively few of us understand exactly how Mitt Romney has used his offshore investments to reduce his taxes by how much. Romney hopes to use that confusion to claim that all the money he has in the Cayman Islands hasn’t actually reduced his taxes, saying straight up that he’s gotten “not one dollar of reduction in taxes” from his Cayman investments or Swiss bank account. But the New York Times‘ Michael Luo and Mike McIntire conclude that personal tax reduction may not be Romney’s biggest Cayman advantage:

A review of thousands of pages of financial documents and interviews with tax lawyers found that in some cases, the offshore arrangements enabled his individual retirement account to avoid taxes on its investments and may well have reduced Mr. Romney’s personal income tax bills.

But perhaps a more significant impact of Mr. Romney’s offshore investments has been on the profit side of the ledger — in the way Bain’s tax-avoidance strategies have enhanced his income.

In other words, Bain avoided the taxes through complicated offshore investment strategies, increasing Romney’s profits. Then, Romney’s own tax bills on those tax avoidance-inflated profits were, most likely, further reduced by the location of his investments in the Cayman Islands and other notorious tax havens. It’s so simple, I wonder why you or I didn’t think of that. Oh, right:

…these tax-avoidance strategies are woven into the fabric of Bain’s deal making. While hardly a novel concept and not unique to Bain, the inevitable result is that elite investors like Mr. Romney are able to increase their fortunes in ways unavailable to most taxpayers.

And whatever Romney has done with his personal taxes (a question we know much less about than we should, thanks to his secrecy), he created Bain, with all its tax-avoidance strategies. He’s asking us to just trust him on that “not one dollar of reduction in taxes” thing when it comes to the years of tax returns he won’t make public. Does that kind of trust sound like a good thing to you?


Three big questions that show how little we know about Mitt Romney’s taxes


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Mitt Romney and Bain buddies, before they sought membership in the victim class (the one that does not pay federal income taxes)

Mitt Romney thought if he doled out a few meaningless details about his tax history, voters would be satisfied, too stupid to realize we didn’t actually know much more about how he conducted his business and fulfilled his obligations (or not) to the government over the past 20 years. But voters aren’t as stupid as Romney thinks we are, and we still have as many questions as answers on his taxes. ProPublica rounds up three of the giant questions. Like, how did Mitt get $100 million into an IRA? And:

How much did Romney make before 2010?

While Romney has disclosed his average effective tax rate for the last two decades, he hasn’t said how much he earned in those years or how much—the dollar amount—he paid in taxes.

That’s an important distinction, said Daniel Shaviro, a tax law professor at New York University. Various tax-planning strategies may have enabled Romney to reduce his adjusted gross income in some years.

This question maybe more than anything shows how meaningless the letter Romney’s accountants put out is: It’s supposed to make us stop asking questions, but we still don’t know how much money he earned before 2010. Or really how he earned that money, for that matter. Another of ProPublica’s questions is really an umbrella question:

What about Romney’s investments offshore?

Good question! We don’t know how much money Romney has in which countries. We don’t know whether he’s consistently declared his foreign income to the IRS when and how he should. We don’t know what taxes he’s used foreign investments to avoid.

These questions just scratch the surface. We know Romney’s average tax rate per year, but not his cumulative tax rate. We don’t know how many people work for him as household staff, or how much he pays them. In short, Mitt Romney is running for an office for which it’s traditional to release several years of tax returns, at a minimum, and he’s released two. He’s running for president on the basis of his business career and his supposed fitness to run the economy, but he won’t let us see how he has managed his own business. Basically, Mitt Romney is asking you to vote for him because he’s rich, but he’s refusing to let you see the details of how he got that way.