During the same nomination battle, Romney abruptly changed his tax policy to placate the supply-side-Wall-Street-Journal-Grover-Norquist axis in the GOP. Romney’s initial tax proposal was relatively modest. The right wasn’t happy. No problem, said Romney, and out came his new tax plan that included a 20 percent cut in income tax rates, “rate cuts” being a term of near-religious significance to supply-siders.Here's what Romney said:
Romney pointedly asserted (again, in the primaries) that he wanted the tax cut to go to everyone, “including the top 1 percent.” But this doesn’t sell to swing voters now, especially after the leaked video in which Romney wrote off 47 percent of Americans as incorrigibly dependent. So in the first debate, Romney tried to pretend that he didn’t want to cut rich people’s taxes. He reassured us that “I’m not going to reduce the share of taxes paid by high-income people.” (By the way, he could cut taxes for the rich a lot and still keep their “share” of the government’s overall tax take the same.)
Well, sure. I'd like to clear up the record and go through it piece by piece. First of all, I don't have a $5 trillion tax cut. I don't have a tax cut of a scale that you're talking about. My view is that we ought to provide tax relief to people in the middle class. But I'm not going to reduce the share of taxes paid by high- income people. High-income people are doing just fine in this economy. They'll do fine whether you're president or I am.There is a difference - a huge difference - between reducing the "amount" and reducing the "share". If I pay $80 in taxes and you pay $20 in taxes, I'm paying 80% and you're paying 20%. If a politician says he's going to reduce the amount of your taxes but not mine, the meaning is pretty obvious - your taxes go down, mine stay the same. A 20% tax cut would leave me paying $80, but you would pay $0.
But the word, again, is "share".
Back to that 20% cut: If both of our tax rates were reduced by 20%, I would pay $64 an you would pay $16. And guess what? My share of the taxes would still be 80% despite a massive reduction in the amount I paid.
Ah, you say, but how do you square that analysis with the following:
And finally, with regards to that tax cut, look, I'm not looking to cut massive taxes and to reduce the — the revenues going to the government. My — my number one principle is there'll be no tax cut that adds to the deficit.How can that work if you issue a significant tax cut?
If Romney does nothing, the deficit is going to drop by hundreds of billions of dollars as we emerge from the recession. Let's say the deficit were projected to drop next year to $600 billion. You cut taxes by $400 billion and the deficit goes right back up to $1 trillion. But wait - didn't you just increase the deficit? No! You reduced the deficit from $1.1 trillion to $1 trillion. Sure, it might have otherwise be smaller, but you can say with a straight face (or psychopathic smirk), "I told you the truth. There was no tax cut that adds to the deficit."1
But you object, "The deficit isn't going to drop that quickly." To which I respond, "Taxes will be decreased in phases." Romney's been playing games with spreadsheets for most of his adult life. This is just another game, but with a far less sophisticated audience than he dealt with at Bain.
Similarly, Romney's stated "jobs plan" is to lean back in his chair, watch the economy grow - natural growth over the course of the next four years is projected to add 12 million jobs, even if the President does nothing - and call it a "plan".