One thing about increasing taxes on "small businesses". This is a claim Romney likes to make. FactCheck has reported on it before..."
According to the Joint Committee on Taxation, only 3 percent of individual taxpayers with any net business income fall into the top two tax brackets, which are the ones that would increase. It’s true that about half the business income that flows through to individual tax returns is taxed at those top two rates. But an awful lot of those “businesses” are hardly “small.” Many are huge. The JCT said that nearly 20,000 partnerships and so-called “S” corporations — taxed as personal income — had receipts of more than $50 million in 2005."
We've moved onto the deficit now...
Romney: 1. "Well, mathematically, there are three ways that you can cut a deficit. One, of course, is to raise taxes. Number two is to cut spending. And number three is to grow the economy, because if more people work in a growing economy, they're paying taxes and you can get the job done that way."
Romney doesn't want to raise taxes, obviously. He wants to grow the economy. Sure, noble goal. Most of the economic growth of the last twenty years has been under Bill Clinton. Clinton had a much higher tax rate than George W. Bush. Romney claims that his tax rate will increase economic growth by 3%. Again, George W. Bush only had an economic growth of 3% twice in 8 years. Bill Clinton did it 6 times in 8 years. The problem of this argument for Romney is as follows: Clinton had a much higher tax rate than George W. Bush. Clinton was roundly criticized by Republicans at the time for raising taxes and how it would essentially destroy the economy. Of course, it didn't happen. So, why didn't it? Either higher tax rates do not negatively affect the economy or the executive just doesn't have that much impact on the economy. Either way, not a winning argument for Mitt Romney. It's important to note that Obama has lowered taxes for individuals and businesses as reported yesterday and extended the Bush tax cuts. Obama's increase in taxes hasn't happened yet.
2. "The President would prefer raising taxes. I understand. The problem with raising taxes is that it slows down the rate of growth."
Tell that to Bill Clinton. Or Ronald Reagan. Yes, Reagan rasied taxes. Economic growth ensued. I understand, the idea is that higher taxes hurts economic growth but it doesn't match up with reality.
3. "What things would I cut from spending? Well, first of all, I will eliminate all programs by this test if they don't pass it: Is the program so critical it's worth borrowing money from China to pay for it?"
That's a worthy strategy. Unfortunately, someone could make this argument against it. According to the Guttmacher Institute, every $1 spent on helping women avoiding pregnancies they did not want, have saved $3.74 Medicaid expenditures that otherwise would have been needed. Well, Republicans have decided that Planned Parenthood is non-essential. But a fiscal argument could be made for funding it.
4. "Obamacare is on my list."
Romney has a fundamental misunderstanding of Obamacare, which I'll discuss later. But, again Obamacare doesn't actually cost that much. Solvency in Medicare. But there's disagreement between the two candidates, there, too.
5. "I'm going to stop the subsidy to PBS. I'm going to stop other things. I like PBS. I love Big Bird. I actually like you, too. But I'm not going to keep on spending money on things to borrow money from China to pay for it. That's number one."
That's fine. The federal spending for PBS is about one hundreth of one percent of the federal budget. It accounts for 12% of PBS's funding. If that's what you want to cut, fine. I'm just glad we got a specific.
6. "Number two, I'll take programs that are currently good programs but I think could be run more efficiently at the state level and send them to the state."
Like what? I'm genuinely curious. The other question I'm curious about is how much funding does each state get from the federal government in order to implement current programs? How much would this increase with the addition of new programs? I actually don't know.
7. "Number three, I'll make government more efficient and cut back the number of employees, combine some agencies and departments. My cutbacks will be done through attrition, by the way. "
That's a fine plan. Unfortunately, it still lacks details. What agencies will be combined and where will these employees go after getting cut back? What impact will this have on the economy, if you will?
8. "The President said he'd cut the deficit in half. Unfortunately, he doubled it -- trillion-dollar deficits for the last four years. The President has put in place as much public debt -- almost as much debt held by the public as all prior Presidents combined."
President Obama did say that he would cut the deficit in half. He has not done that. According to the CBO, the deficit will be cut in half by 2014. He has not doubled it. Not even close. The deficit was projected to be $1.2 trillion in 2009. This projection was in place before Obama took office. It ended up being $1.4 trillion. I could go on and look at it each year, if you would like.
Sorry, that was a lot on Romney. We'll go to the next post.