Thursday, August 2, 2012


Below President Obama explains to a Florida audience how Romney's plan to double down on the Bush tax cuts mainly for the rich must inevitably cause the taxes of almost everyone else to rise. This is not a political attack. It is not fear-mongering. It is not class warfare. It is just plain, cold, hard numbers, based on an analysis by the Tax Policy Center, an independent and respected organization that analyzes tax issues. I'm not going to run through that analysis here, because it can be found elsewhere, see, e.g., Steven Benen or John McKinnon or Suzy Khimm.

This is not rocket science. It's just common sense. If you cut taxes for the wealthy, you have to raise taxes on everyone else to keep your plan revenue neutral. The Romney campaign's only response to the study so far is to argue that the study does not take into account of the phenomenal economic growth that will result from the proposed Romney tax cuts. As the president says, "They have tried to sell us this trickle-down, tax cut fairy dust before." And how well did that work out the last time?

Here is why the argument makes even less sense this time around: It is one thing to argue that tax cuts are going to stimulate the economy. Pretty much everyone agrees that cutting taxes will have some stimulative effect on the economy, as long as you're willing to tolerate the resulting deficits. That's why President Obama wants to keep tax rates low for almost everyone. But if your plan is instead to propose new, huge tax cuts mainly for the top bracket taxpayers and corporations, and to offset those tax cuts with not only tax increases on everyone else, but also substantial cuts in government spending, then it's pretty hard to argue that your plan is going to cause a phenomenal expansion of the economy. Instead, it looks like the main effect of Romney's plan will be to make a society that has already tolerated an increase in inequality to levels not seen since the 1920's, even more grossly unequal. And that means that not only are you not going to solve the problem of creating more economic growth, you're also going to make what many people would see as one of our biggest problems--economic inequality--much worse.

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