The ongoing debate over the Tax Policy Center report that showed a tax increase for the bottom 95% of income taxpayers, along with gigantic gains at the top, if Romney's tax reform plan was enacted in accordance with its parameters (including revenue neutrality) is an interesting case study regarding the degree to which the actual truth content of claims ends up mattering in public political debates.
There is really no reasonable way to dispute that the TPC study is at least approximately correct regarding the distributional implications of the Romney tax plan, over the next few years, as it has been described. Of course, if Romney set forth a more detailed plan that differed from the TPC-assumed parameters, one would have to make an estimate as to that. But the bottom line would not change significantly unless the plan differed substantially from its announced parameters (large rate cuts, especially at the top, to be offset by base-broadening that attempted to restore some progressivity but that left alone certain investment related items such as the capital gains and dividend tax rates).
I happen to think that Romney wouldn't increase taxes on the bottom 95% to the extent suggested by the TPC study, but that is because I would expect him to explode the budget deficit instead of actually making the plan revenue-neutral. The TPC study is not in error by reason of its assuming that he would actually do what he says he plans to do. (And of course, what do I know about what they really would do? I am just guessing, like everyone else.)
So how does the Romney campaign respond? Mainly with shoot-the-messenger. These are "leftists," it's a "joke," etcetera, even though everyone knows that TPC is serious, capable, independent, and objective. (Indeed, as has been widely reported, the Romney campaign was happy to cite TPC studies of other Republican candidates' plans.)
Second, economic advisors to the Romney campaign claim that an avalanche of job creation means that the poor and middle class will benefit after all. Never mind that there is no plausible basis, in Romney's reported policy plans, for expecting any such thing. (By the way, it is possible that he might actually be planning to create much greater stimulus than he admits to, through unfunded tax cuts plus an orgy of military spending, perhaps with a new Middle East war thrown in, but that again gets us into speculation about unannounced plans.)
How could the Romney advisors, several of whom I know and respect from other, more academic contexts, live with themselves regarding the deception here? Several ways. First, politics ain't beanbag, and it is a business once you get personally involved. Second, while they must know that what the TPC study says is at least approximately true, they are less averse to these distributional outcomes than are policy types who are more to the left (or, if you prefer, less to the right). Third, they believe that, over a longer time frame, fully financed lower rates will indeed bring efficiency and productivity payoffs that eventually leave everyone better-off. This of course reflects that they tend to have a higher estimate of the efficiency and productivity gains than policy types who are to their left would generally have.
In sum, they consider the regressive results that are exposed by the TPC study to be genuinely worth it over the long haul. If you want to get to a better steady state (as they see it), you've got to start sometime. I happen to disagree with them, because I have different evaluations of both pieces (the short-term distributional cost, and the claimed long-term efficiency payoff). But this is all in the realm of reasonable disagreement.
Unfortunately, however, the actual case that they believe is too hard a sell for a heated presidential campaign. Thus, the Romney campaign must resort instead to shoot-the-messenger regarding the TPC study, plus ridiculous claims about short-term job creation. And this may well succeed in throwing enough dust over the indisputable (as in the old joke, "parties disagree on whether the Sun rose this morning") in order to take the edge off the TPC study's clearly correct finding.
This is a good example of why I wouldn't want to be a policy advisor in a presidential campaign. But I suppose that is a matter of personal taste.
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