Saturday, October 6, 2012

The return of fuzzy math


Quoting from the site – excellent analysis:

The contemporary Republican party faces a fundamental political problem and it is this: the policy position to which the party is most committed is very unpopular. Over the last decade the single most urgent, durable domestic priority of the Republican Party is reducing taxes on wealthy Americans. If there is one thing you can bank on when the Republicans are in power, it's that.

So if you're a Republican seeking the highest office in the land, you've got a real problem. On the one hand you absolutely have to advocate for and push through tax cuts for the wealthy, knowing full well the electorate as a whole does not like or want them. So what do you do?  Well, up until this point, Mitt Romney has floundered a bit, but Wednesday at the debate, he fully embraced the very effective strategy used by the last man to successfully pull off this particular bait and switch: George W. Bush. The centerpiece of Bush's campaign was a large tax cut, skewed heavily to the wealthy. But rather than defend this principle of tax cuts for the wealthy, he simply obfuscated and hand waved and misled about his tax cuts' effects.

Bush: Everybody who pays taxes ought to get tax relief. After my plan is in place, the wealthiest Americans will pay a higher percentage of taxes then they do today, and the poorest of Americans, six million families, seven million people won't pay any tax at all.

Notice the sleight of hand. The wealthiest Americans will pay a higher percentage of taxes than they do today. Not a higher percentage of their income in taxes, since that would be an outright lie. This is a very common bit of conservative misdirection used to hide the distributional unfairness of their tax cuts. 

Even in Herman Cain's regressive world of a 9-9-9 flat tax, you can imagine that with enough concetration of income at the top, the wealthiest households would still pay the majority of total income-tax revenue. That doesn't reflect how progressive or fair the taxation system is, it reflects just how unequal incomes are. Bush did it again in the next debate, too.

Under my plan, if you make -- the top -- the wealthy people pay 62% of the taxes today. Afterwards they pay 64%. This is a fair plan. You know why? Because the tax code is unfair for people at the bottom end of the economic ladder. If you're a single mother making $22,000 a year today and you're trying to raise two children, for every additional dollar you earn you pay a higher marginal rate on that dollar than someone making $200,000, and that's not right.

At the time, this drove observers to distraction. Bush was running on a huge tax cut for the wealthy and refusing to admit he was running on a huge tax cut for the wealthy. Paul Krugman nearly broke his keyboard writing column after column pointing this simple fact out. "The big lesson of this year's campaign," he wrote, "a lesson that we can be sure politicians will take to heart -- is that a candidate can get away with saying things that are demonstrably untrue, as long as the untruths involve big numbers."

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