Romney's Shell Game (one of them)

So Mitt Romney believes putting more money in the hands of the job creators (aka rich people) will spur economic growth and so he will cut their taxes by 20%.  But he also said in the first debate that he will not reduce the tax burden of the wealthy (aka job creators) at all.  So...reduce tax rates in such a way that it simultaneously puts more money and no more money in the hands of the wealthy.

How stupid does he think the American voters are?  And more importantly: is he right?

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He's absolutely right. It's a nightmare for the rest of us and a goldmine for the two parties, mega corps and banks.

Well, American voters ARE stupid. That much is evident from the fact that Romney is even being seriously considered.

And supply side economics is the dumbest concept around. Corporations do not create jobs just because they have a lower tax rate - they create jobs if and only if there is a demand for their products.

And how do you generate demand if no-one has any money to buy their products? Answer - you can't. The only solution which has been shown to work is demand side economics. Put more money in the hand of poorer people - you know, consumers. The 47% who Romney thinks he doesn't have to worry about.

It is proof positive that many of these 47% are morons if any of them are considering voting for Romney, who will take away their health care and cut taxes for rich people while letting the 47% pick up the tab.

Romney will tell his audience what they want to hear. He is from the corporate world, where he is accustomed to underlings saying "Yes, sir!" to whatever he says. He seems to think he's entitled to the Presidency. I have seen no evidence that he believes in anything other than Mitt Romney.

Yes, some fraction of American voters are that stupid. Some people notice that the President is, shall we say, much more melanin-endowed than they are, and some even consider this trait to be disqualifying in a President. (For some people, especially in the South, the Civil War never really ended.) The question is whether that fraction is large enough.

By Eric Lund (not verified) on 23 Oct 2012 #permalink

So, I don't believe in Romney-omics, but in theory this isn't actually one of his self-contradictions:

1) To provide incentives to work harder, the theory is that the marginal tax rate is what is important. Romney is proposing to cut the marginal tax rate.

2) in order to keep the tax burden the same, he is proposing to eliminate deductions. This might reduce the incentives to do the activities for which people get deductions, but will not reduce the incentive to work, since deductions don't act at the margin.

Now, I personally believe that the economics of work incentives are not very good, and that cutting the marginal tax rates for rich people will not actually get more work out of them (maybe it would if the marginal tax rate was 90%), and I think that in the current economy we are demand-limited not investor-class limited, but anyway, I think this particular critique is not as obvious as it seems on the surface.


(oh, yeah, and of course there's the minor point that not enough deductions exist to make the math work, regardless of Romney's 25 years of business experience, unless you expect the magic economy fairies to turn the tax cut into a giant economic boom that raises trillions in new revenue...)

Unfortunately the meme was floated, and rapidly became GOP dogma, that cutting taxes raises revenue.

It all started with Laffer and his curve. It was a fine bit of economic understanding to figure out that both 0% and 100% taxation would yield not taxes and that as taxes increased you always would get something less than the predicted amount because people would engage in tax avoidance. The converse would also be true: decreasing taxes doesn't drop income the predicted amount because the extra money tends to increase activity. It was a fine insight but the described effects were also small. At no time did Laffer claim that dropping taxes would entirely make up for the direct loss in increase activity. This was an exaggeration added by Reagan's economic team to cover their desire to cut taxes. It was a lie and they knew it was a lie. But it was repeated so often, and so loudly, that it became part of the GOP catechism. So, to this day, every GOP budget makes assumptions that if you cut taxes the revenues will not just be made up but will, in a miracle akin to the loaves and fishes routine, magically multiply to fill the hole and go on to create a surplus.

It has never worked out that way but, as with all such articles of faith, they are not going to allow mere evidence, or their lying eyes, interfere with their belief.

Of course, if you are a true believer in such things the Romney/Ryan budget makes a whole lot more sense. They really do maintain that cutting taxes will let loose a torrent of economic activity that will return several times the taxes lost and bring general prosperity.

And the big question: how do you counter an article of faith with facts and logic? It is a recurring issue.

art, you are obviously a mis-informed european communist, because you don't understand how american politics functions. could you please abstain from your primitives reipes of how a compex economy will successfully work. americans don't need your low-intellectual advice of a rude european leftist ideologist without any knowledge of how to run economy. you have never created jobs, never been in important responsibility for a substantial number of employees and your thoughts totally lack any proximity to actual practice.

can anybody of the climate chaotics explain why you all are liberals, vote democratic and hate the tea party? you all praise obama and detest romney. why are you all so primitive slaves of political ideology of green leftist al gorisms.

any ideas from your overloaded brains, you poor climate slaves???

Well.kai has finally asked an intelligent question.

Why do we hate the tea party? Because they are racist morons.

But I have never voted democratic.

It's not just the educated majority who hate the teabaggers, kai.

And why do you give a damn, since you're not american?

The grand delusion is that money trickles down. It only trickles up... except maybe to manufacturers of solid gold bath plugs.
The comment above that no money lower down means no customers is dead right. Even Henry Ford had the wit to realise that his workers needed to be paid well enough that they could afford to buy his cars.

kia - I assumed that your comment, directly below mine, was meant ironically. It takes a certain deft touch and keen awareness to both parody the opposition to simultaneously get every single factual reference wrong but maintain a serious tone as a way to make fun of them. I was thinking that you were quite the writer to get the pitch and tone of the Poe so perfect.

But then I read the next post. You really should have stopped while there was an illusion of intelligence, wit, and credibility. The perfection of getting everything exactly wrong was not a writer's ploy but a artifact of your being completely wrong. Come to find out you weren't just speaking as a dolt, you are one.

Gratuitous ad hominem attacks used as reply to factual assertions just screams of desperation and a complete lack of answers. But given your profound ignorance, an ignorance so deep that it is likely the Dunning - Kruger effect has crippled any ability to recognize your incompetence, I will take pity and provide you with one sound answer.

I'm a liberal because liberalism works. It is the general course of human progress. It is a difficult world view to maintain and it deeply complicates things. Which explains why most liberals are smart and hard working intellectuals while dolts prefer conservatism because it is both simpler and easier. The extra burden of thought and effort required of a liberal has its rewards. As a liberal I am part of a long tradition of people who actively advance the human race. Name an advancement in social, humanist, and even technical development and it was the liberals pushing it. The Magna Carta was a liberal document forced into existence by liberals, as was the US declaration of independence and constitution. Most technological advancements come from liberals because it is in the nature of liberals to try to make things better. Conservatives, as the name implies, try to maintain the status quo and existing power structure. It is the liberals who drag the conservatives, kicking and screaming and always still focused on an imaginary perfect time in the past, into the future.

Being a liberal means being disappointed. We have so very far yet to go to get to where we should be, and every delay, stumble and setback is paid for in blood and human suffering but the arc of human history is clear; liberalism works and progress is, in the long term, mainly upward. I am proud to stand with and in that tradition.