Like most Americans, the economy is in my list of top concerns and I would prefer if things were going better. Both Romney and Obama claim that they have a plan to swing things around and it is likely that their ability to convince voters in this matter will have a meaningful impact on the election.
In the case of Obama, I have a good idea of his plans and the likelihood of success. While there are various straw man attacks against Obama and some conspiracy theories regarding the employment data, the overwhelming evidence shows that the economy has been slowly recovering. At the top, as always, things are rather good. Corporate profits are high, taxes are low, and the stock market has been mostly positive. While the president’s impact on the economy can be reasonably debated, if there is an impact it would seem that Obama’s has been largely positive. After all, even the Republican narrative has changed from a tale of complete failure to the complaint that the recovery under Obama has not been dramatic enough. Naturally, Romney claims that he will be able to turn things around.
One of Romney’s main plans is to cut taxes by 20%, presumably in the hope that this will help the economy. As might imagined, the causal connection between tax cuts and economic recovery is a rather dubious matter. It mostly seems to be a matter of ideology rather than evidence-conservatives tend to swear by it while liberals tend to reject it. In any case, the economic crash took place after the Bush tax cuts went into effect and, of course, large corporations are very adept at not paying taxes-thus raising clear questions about the efficacy of tax cuts in this matter. As such, it would be unwise to infer that this plan will jump start the economy.
Romney has also claimed that his tax plan will not change the progressive aspect of the current tax system. The narrative against Romney is, of course, that he intends tax cuts for the wealthy while shifting the cost burden downward. Since the vast majority of voters are not wealthy, Romney needs to convince these voters that he will not be shifting the burden to them. By claiming he will keep the progressive aspect of the current system, he can claim that the burden will not be shifted. On the face of it, cutting taxes and keeping the progressive system in place seem compatible.
Most importantly, Romney has claimed that his plan will not increase the deficit. Given that his proposed tax cut would (if not offset) increase the deficit by $5 trillion, Romney needs a plan to prevent that from happening.
Romney has, of course, claimed that he will make cuts in spending. One specific example was that he would cut PBS’ federal funding. Since this would only cut spending by about $430 million, Romney would need to come up with much more in the way of cuts. While people are often quick to condemn the entitlements they do not receive, most people receive entitlements that they certainly do not want to lose. As such, it is no surprise that Romney has not laid out a detailed plan of cuts.
Romney has also claimed that he will close loopholes and eliminate deductions to offset the tax cut. He has not, of course, specified what loopholes he will cut or what deductions will be eliminated. This is politically wise of him-as with entitlements, many people have beloved loopholes and deductions (such as the mortgage deduction). Committing to eliminating popular loopholes and deductions, such as the mortgage deduction, would cost him votes and hence he is not committing. Rather, he says that the details will be worked out after he is elected-thus he is comMitting rather than committing. As such, voting for Mitt is voting for something of a mystery.
There is also the factual issue of whether or not closing loopholes and eliminating deductions would suffice to offset the tax cuts. While various scenarios can be considered, without knowing Mitt’s actual plan, the issue cannot be properly settled. Also of concern is the matter whether or not Mitt would be able to hold his ground against the addition of new deductions and loopholes (and the return of the old ones). As such, much that is important is also a mystery.
A final point of concern is to note that Romney seems to be claiming that his plan will result in no meaningful change. That is, the tax income will remain the same and the system will remain progressive. As such, one might wonder what the plan actually does.
So, what is the plan, Mitt?
Commence Obama bashing red herrings to switch the issue away from Mitt’s plan in…