Romney's and Ryan's LAUGHABLE alleged 'Harvard and Princeton' support for their 'tax plan'
On Meet the Press this morning, Mitt Romney confidently tried to parry David Gregory's questions about tax arithmetic with references to, "my goodness, Princeton and Harvard". Paul Ryan echoed these sentiments on This Week with George Stephanoupoulos.
What were they talking about? I've seen the Romney-Ryan economic "white papers", and IMO they fail to answer the "arithmentic" questions Bill Clinton asked in Charlotte.
"Harvard" is an embarrassment of a big-payday fluff 'white paper' by one radical-right extremist (John Taylor of Stanford), two right-wing textbook authors (Greg Mankiw of Harvard, and Glen Hubbard of Columbia), and one longstanding rightwing hack from AEI (Kevin Hassett). Instead of "Harvard" and "AEI", Romney-Ryan could have said, "Stanford, Harvard, Columbia, and AEI". But the Stanford economist was the one of the four Romney advisers who embarrassed himself the most: Ezra Klein of the Washington Post observed that of fourteen relevant economic studies that have examined the impact of President Obama's American Recovery Act, ONLY John Taylor's found no effect (see http://www.democraticunderground.com/10021097643 ). But Romney's economists ignored the 13 positive studies and cited only Taylor's. It is a SCANDAL that in the Romney 'white paper', Taylor simply cited himself and ignored all the other relevant studies, all of which disagree with him strongly!
And "Princeton" (see below for my first impressions) is a piece of fluff just churned out by another rightwing textbook author, Harvey Rosen (see http://www.princeton.edu/ceps/workingpapers/228rosen.pdf ). This is a very thin, back-of-the-envelope calculation with ONE spreadsheet table intended to refute a major quantitative study of the Romney tax plan by serious tax scholars (See http://www.taxpolicycenter.org/publications/template.cfm?PubID=1001631 ).
I find Romney's attempted misuse of academicians for hire pretty shocking.
WHAT'S YOUR OPINION?
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Rosen claims, "I analyze the Romney proposal taking into account the additional income that might be generated by economic growth. The main conclusion is that under plausible assumptions, a proposal along the lines suggested by Governor Romney can both be revenue neutral and keep the net tax burden on high-income individuals about the same. That is, an increase in the tax burden on lower and middle income individuals is not required in order to make the overall plan revenue neutral." He makes projections from the summary table of the latest availabe IRS Statistics of Income (for 2009)
Any competent first-year economics graduate student would shoot him down on several underlying assumptions:
1. Rosen vastly overstates the revenues from loophole closing on top income earners. He assumes that legislation would be written to remove ALL Schedule B deductions for high earners, ignoring the income shifting and income hiding that such legislation would generate. Practical legislation would preferably remove all of certain classes of deductions for all taxpayers, regardless of income, in order to minimize income shifting and income hiding in response to the "tax reform".
2. However, Rosen has the nerve to assume a minimum of 3 percent extra wage and capital income for top-rate taxpayers as "dynamic macroeconomic effects" of Romney's plan. Such "dynamic scoring" is a longstanding no-no in tax policy analysis. It is fantasyland, and IMO should be ignored completely. Fortunately, Rosen's table allows that fantastical "dynamic scoring" to be ignored.
3. Rosen chooses to define high incomes as greater than $100,000 or greater than $200,000. But the policy-relevant threshold Washington is debating for high incomes is $250,000.
Either Rosen was too lazy to look at disaggregated IRS data or he tried $250,000 and it did not work as well. Even a $200,000 threshold leaves him $75 billion a year short of revenue-neutrality. That's $75 billion to be recouped from repealing tas deductions for middle-class mortgage interest, charitable donations, state and local tax payments, and other Schedule B deductions for those short of the top rate.
If this apparent first-draft by Harvey Rosen stands as it is, with no revisions, IMO it is a major academic scandal. IMO Rosen should be ASHAMED for having put this out there for national scrutiny 58 days before a crucial election.
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Great post!
Yeah. Obama's a working class guy, and Ryan and Romney come from millionaire families.
Guess who the people believe.
