Editorial: Tax plans define two candidates
In assessing the two leading presidential candidates, Republican Mitt Romney and Democrat Barack Obama, a good place to identify their respective priorities is to consider their tax plans.
Those proposals, after all, represent how each candidate intends to finance the nation’s business, to balance the budget and, if possible, to whittle away at the national debt.
While Republican Mitt Romney doesn’t trumpet his proposal as a selling point to Joe the Plumber, he does tout it at campaign fundraisers among the rich and it is no secret. In clear terms he has told the nation he plans to reduce taxes for the wealthy, reduce services for the poor and middle class and hope the rich will spend more of their tax windfall to stimulate the economy. It’s a repeat of the George W. Bush tax strategy — solely dependent on the trickle-down theory to stimulate the economy (that is, give more tax breaks to the richest few, so they’ll spend more money and stimulate the nation’s economic engine.) It didn’t work during the George W. Bush years – economically speaking – but politically, it seemed to be an appealing message to voters, so he and the GOP strategists thought they’d try it again.
Romney’s plan is amazing for its audacity. It proposes a large tax cut for the top 60 percent (the rich and middle class), a huge tax cut for the one and two percent at the very top, and a significant tax increase for the bottom percent as he allows a few temporary tax breaks that benefit the low-income folks to expire.
President Obama, on the other hand, will keep the current tax rates (retaining the tax cuts allowed by President Bush in 2001 and 2002, and which were set to expire in 2012) for almost everyone, except for the very top few percent. Those who make $250,000 annually, and those who represent the very rich (million-plus annually) will see increases that restore the tax rates as they were before Bush’s ill-fated cuts in early 2001-2.
For those who forget, the nation was running a budget surplus when George W. Bush took over the presidency from former President Bill Clinton. Clinton had raised taxes and run budget surpluses for three consecutive years. Bush, on the other hand, started two wars, cut taxes across the board (including on the wealthiest elite), expanded Medicare coverage, and, consequently, ran budget deficits each year he was in office and watched as the national debt almost doubled from $5.6 trillion to $10 trillion in 2008 when president Obama was elected. And that was before President Bush and a reluctant Congress, with many Democrats leading the way, voted to approve TARP (which bailed out the nation’s banks and financial institutions, including AIG, in 2008) bringing the total increase in the national debt under Bush’s eight-year reign to well over $7 trillion.
Those on the political right will maintain that the national debt has increased under President Obama, and that’s true, but it is primarily because of the Great Recession of 2008 (which had started a few months before Bush left office) has held the nation’s economy hostage for the past four years, but also because defense spending skyrocketed under Bush and the nation’s bailout of the banks and automotive firms were all carried forward during Obama’s term even as revenues dwindled in the recession.
But balancing the books by revenues are only part of the equation.
When voters look at the budget proposals, they see that Romney has promised to offset the cost of most of his tax plan through spending cuts and tax reforms, while increasing spending on defense. He also has said he will honor current Medicare and Social Security’s benefits (that is, spending) for the next decade. About the only way possible to do that, however, is to cut deep into programs for the poor and reduce the tax preferences that benefit the middle class — a double-whammy to that group of Americans, while holding the very rich harmless.
President Obama and Democrats in Congress, on the other hand, are set to maintain existing benefits to the poor and middle class, while curbing tax loopholes, cuts and benefits to the very rich.
The two approaches are about as different as you can get and offer a plain choice to the country between setting up an even wealthier elite, or bolstering the nation’s middle class, while providing as much as ever for the poorest among us. That the race is even close at this point is testament to the fact that presidential politics does not hinge on pocketbook issues, or even economic fairness.
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