Friday, October 12, 2012

Romney/Ryan is Malarkey for the Middle Class

By Dale Bowling

The Biden/Ryan debate last night demonstrated once again, how full of malarkey the Romney/Ryan budget and tax plan are.

At least to the extent we know about them, which admittedly isn't much.

We know that Romney/Ryan have endorsed a 20% tax cut for everyone, and huge cut in the corporate tax rate (as well as eliminating the estate tax and capital gains taxes) which by 2015 would reduce revenue by $480 billion. Take that out a decade and we're talking $5 trillion dollars over ten years that the government won't have.

Makes the Bush Tax Cuts look tame, doesn't it?

Now I know what you're thinking. You're thinking that, "hey, everyone gets the tax cut so how is this an example of me being screwed over by Republicans, again."

Glad you thought that, because here's how they say they're going to finance that tax cut. They're going to eliminate most deductions or at least limit them to certain number (we don't know yet).

Economists have already weighed in that there aren't enough deductions to eliminate that would amount to $5 trillion over 10 years- even if Republicans got rid of all of them.

Now the highest earners would come out ahead on a deal that allowed them a 20% tax break in exchange for losing their ability to make deductions.

Mitt Romney would pay almost no taxes under this plan.

But imagine you're middle class and you own your home. A lot of you probably fit this description.

If you were deducting your home mortgage interest and your property taxes and now you're not able to do that because that was the price you had to pay to get your 20% tax cut, are you ahead? Especially once you eliminate the other deductions like child tax credits and medical expenses, etc.?

Not likely.

And ironically you probably bought your house in part because you could offset some of the cost on your taxes. You would be paying more for a house you already own. Does eliminating deductions help build a housing resurgence? What would that do to the asking price of your home when you go to sell it?

And what does the Romney/Ryan push to eliminate deductions do to private charity giving? Non-profits are going to lose a lot of revenue if people can't also deduct their charitable giving. I see a lot of bake sales in their future.

And once you combine this mess with the $5 Trillion cut in spending Romney/Ryan want - which means laying off millions of government employees and weakening businesses and the industries that get federal funding -  are the job numbers going to be robust or just bust?

Is there enough taxpayer money left to invest in Education as Romney said he would in the last debate? Or build all those ships, plans and missiles the Pentagon didn't even want? Or continue to protect our Nation's elderly and poor? Where do you reckon they're going to find that money?

They can add it to the deficit. Or they can increase taxes on the middle class. Or they can simply not invest in America. No infrastructure improvement, no education investment, no social safety net.

Malarkey, indeed.

1 comment:

  1. Yes! Eliminating deductions means paying more in taxes. Isn't that a no-brainer!

    And that's a great remark about the housing resurgence. I ask myself "Would I have bought a house if I couldn't deduct it?". I don't think I would have. It would have been more cost-effective just to rent.