Sep 26, 201211:00 AMLeft Business Brain
with Tom Breuer
Ryan-Romney budget laughably short on specifics
Here’s a quick quiz for you. Of these recent statements made by right-wingers, which is the most disturbing?
a) When a woman is the victim of “legitimate” rape, her body can spontaneously shut down any pregnancy that might result.
b) If Obama is re-elected, he’s going to hand over sovereignty of the United States to the U.N., which will lead to civil war, prompting the president to send in U.N. troops.
c) Paul Ryan is brilliant.
Answer: C, because people actually believe that one.
Sometimes I wonder if some of the fringe kookiness that fills the yawning voids in people’s lives in between intermittent NASCAR explosions is planted deliberately in order to make mainstream GOP thought look sane. (I don’t really believe that, of course, because that would be a kooky conspiracy theory, like the claim that Obama was born in Kenya or that Mitt Romney refuses to release his tax returns because he doesn’t want anyone to see them.)
But I just can’t get over the silly man crush that people have developed on Ryan since Mitt Romney put him on the GOP ticket.
Of course, I’m not an economist. I’m not a doctor, either, but I know that leeching patients and drilling holes in their skulls is not likely to cure the homosexual’s pertinacious inclination toward turpitude and venery. You need a Ph.D. from Oral Roberts University for that.
New York Times columnist Paul Krugman is an economist, however (and a Nobel Prize-winning one at that). And it’s interesting to note that he doesn’t just politely disagree with Ryan. He calls Ryan out for, essentially, having no plan at all.
Indeed, praising Ryan for his mad math skillz and budgetary acumen is a little like lauding a chemist who claims to have discovered cold fusion but refuses to share essential details of his experiments.
Here’s just one of the many barbs Krugman launches Ryan’s way, in response to what Krugman calls a “fantasy” proposal:
Ryan hasn’t “crunched the numbers”; he has just scribbled some stuff down, without checking at all to see if it makes sense. He asserts that he can cut taxes without net loss of revenue by closing unspecified loopholes; he asserts that he can cut discretionary spending to levels not seen since Calvin Coolidge, without saying how; he asserts that he can convert Medicare to a voucher system, with much lower spending than now projected, without even a hint of how this is supposed to work. This is just a fantasy, not a serious policy proposal.
Of course, Krugman isn’t the only serious observer who has pointed out that Ryan’s budget prescription is snake oil. In a scathing review of the spring 2012 iteration of Ryan’s plan (a critique that is well worth reading in its entirety), former Reagan and Bush I advisor Bruce Bartlett calls Ryan’s plan “fundamentally dishonest”:
Another key part of the Ryan plan is a broadening of the tax base to recoup some of the revenue lost from cutting tax rates. Base broadening could be accomplished by abolishing or limiting the use of tax deductions and exclusions that reduce the amount of income subject to tax. According to the Tax Policy Center, the total amount of such “tax expenditures” is about $1.1 trillion this year.
Ryan says nothing whatsoever about what tax expenditures he would abolish. He offers only the sugar of rate reductions without telling us what the medicine of base broadening will be. Ryan says only that he would broaden the base sufficiently so that federal revenues will be in their historical range of 18 percent to 19 percent of the gross domestic product. Revenues will be 16.3 percent of GDP this year according to the Congressional Budget Office. Ryan is therefore presupposing a tax increase of 1.7 percent to 2.7 percent of GDP.
Any tax reform plan that simply asserts it will collect a certain percentage of GDP in revenues while specifying the rate structure but not defining the tax base is fundamentally dishonest, in my opinion.
With regard to the “tax loopholes” Ryan would close (which he conveniently doesn’t identify, choosing instead to claim that he and Romney will disclose them after they’re elected), Bartlett concludes, “It will be impossible to achieve Ryan’s revenue target without essentially wiping the slate clean of every tax preference except for a handful of the most popular ones.”
Now imagine you work for a living (I sometimes imagine this myself) and your managers say they’re going to increase their own pay tremendously, increase yours modestly, and make up for the hit in the budget by eliminating certain company perks and benefits. Then they promptly refuse to tell you which benefits. Health insurance? Dental? Upkeep on the office sprinkler system? Who knows?
Would the appropriate response to such an announcement be to simply nod your head, rub your hands together with glee, and wait for the big windfall? Of course not. So is it really that impertinent to demand that Ryan and Romney specify what tax loopholes they’ll close? Presumably, these tax loopholes would be ones that, as Ryan said in an interview with Fox News’ Brit Hume, “are uniquely enjoyed by the wealthy.”
But how do we know this if Ryan refuses to be more forthcoming? Precisely which loopholes would Ryan prefer to see eliminated? Stashing your money in the Cayman Islands? I don’t think Mitt Romney would like that one.
(Incidentally, if allowing the Bush tax cuts to expire and imposing a fee on individuals who refuse to buy insurance are both tax hikes, why isn’t closing tax loopholes considered a tax hike on those affected?)
Now, Ryan has been very specific about one thing: Via lower income tax rates, his preferred plan would hand oodles of cash back to the very wealthy and a much smaller portion back to the middle class. As for the working poor? Well, based on an April analysis by the Tax Policy Center, if you’re a member of the working poor making less than $20,000 a year, the cost of keeping those two gay guys who live down the street from getting married or defending your freedom can now be measured precisely: It’s $112 to $193 per year. So hey, vote Romney-Ryan if that’s worth it to you. Knock yourself out.
Incidentally, the Tax Policy Center also looked specifically at Romney’s budget, which is similar to Ryan’s (they’re on the same page, after all), and concluded that it’s essentially unworkable without raising the tax burden on the middle class.
Now, why would one be so specific about tax rate cuts while remaining infuriatingly vague about which tax loopholes are worthy of cutting? Might it be one’s plan is either not as kind to the middle class as one claims or that it’s largely smoke and mirrors?
It’s all pretty rich, really (no pun intended). Romney won’t release his own tax returns, prompting people to suspect that he took advantage of a generous number of tax loopholes, and now he and his sidekick refuse to release their tax plans, simply claiming that many generous tax loopholes for the rich will be closed.
In both cases they’re saying, “Trust us, trust us.”
Well, you’ll have to forgive me if I don’t.
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