Tuesday, October 16, 2012

Cynicism and dishonesty in tax reform debate (although, perhaps, what else is new?)

With all the questions that I keep getting about the Romney tax plan and the Tax Policy Center study, I think it's worth reviewing briefly what the Romney people (a group that includes some talented and well-informed economists) undoubtedly know.

They know, as well as any of their critics, that it is impossible for Romney to cut the tax rate by 20 percent, achieve revenue neutrality, avoid a "middle-class" (including upper middle class) tax increase, and keep high earners' taxes from declining overall - especially when they are also committed to preserving current law rules that treat saving and investment relatively favorably.  If they don't know this, they should have their PhDs taken away, and be sent to the corner wearing dunce caps.  But trust me, they know this, and surely they have told Romney.

But the Romney campaign's first calculation evidently was that it made sense politically for him to promise all these incompatible things anyway.  Olkay, that's kind of par for the course, but the follow-up steps were more innovative.

The second calculation was that, if you keep it vague enough and supply virtually no details, you can rebut any attempt to show that it's impossible by saying "That's not how we'd do it."  How can anyone estimate something that has been specifically set up with an eye to making it impossible to estimate?

There is also, of course, a two-birds-with-one-stone aspect to all this.  No tax reform proponent wants to admit in advance that he or she is targeting popular items - say, the home mortgage interest deduction, the exclusion for employer-provided health insurance, and the charitable contributions deduction.  So we understand that they will be a bit shy about admitting all this up front.  But that was only part of the dodge - making the claims impossible to evaluate was the other part.

The Romney camp may have been surprised when the Tax Policy Center actually took on the conundrum they had set, by releasing a study based on reasonable (and generally favorable) assumptions.  So at this point the Romney people made a third calculation.  Let's get people in our camp to issue something that takes issue with the TPC and at least seems to support our stance, they decided.  Then, before long, we will be able to say that we have "six studies" in our favor.  (Why six?  I think because the phrase just sounds better than five studies or even seven.  It's crisp and alliterative.)

Never mind that most of these are not really "studies," and never mind that the honest ones among them - the majority - don't actually support the Romney claims that all of the promises could simultaneously be met, in defiance of simple arithmetic.  They just show how one could arguably come closer than the TPC assumed was possible, in one dimension or another, often by making another dimension worse.  But never mind all that.  You just keep saying "six studies," and what remains in fact a conscious lie by the Romney campaign shifts firmly (they are hoping) into murky "he said / she said" territory, so far as the public debate is concerned.

What's distinctive about all this?  Maybe not so much.  In JFK's 1960 campaign for president, he talked a lot about the "missile gap" between the U.S. and the Soviet Union, which did not in fact exist (or rather, it favored us, not them), and which some reports say he was told during the campaign did not exist.  It's even been claimed that the Eisenhower Administration could have definitely rebutted the claim, but had policy reasons for not disclosing what they knew, and that the Kennedy campaign deliberately took advantage of this expected reticence.  If so, then that was pretty raw as well.

But I do find the Romney camp's tactics here insulting, contemptuous, smarmy, and too clever by half.  It shows a basic political style that we will get to know all too well if Romney wins the election.

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