Romney has claimed that he can do government better than Obama. He relies on his "business experience" at Bain Capital--a vulture fund that uses leveraged buyouts to load companies being acquired with debt that pays for the acquisition, resulting in guaranteed payouts to the equity fund investors and managers like Romney and usually dire situations for the ordinary workers at those companies, on whose backs the productivity gains causing the equity firms' profits are built. That business experience, in other words, doesn't seem very relevant at all to the presidency of a democracy where all of the people matter, not just the few who are rich enough to garner most of the status and prestige and influence that lets them get away with claiming all the productivity gains for themselves no matter the cost to the workers.
But what about Romney's tax creds? He claims that he will be a better president than Obama because he will know how to set the tax code straight so that it will lead us to growth and prosperity. Does that calculate? First, the path he proposes is one we've tried before, under George W. Bush. It led to financial chaos and the Great Recession and left many ordinary Americans in desperate situations, with underwater mortgages, high debt burdens, and stagnant or declining incomes. It was, in short, a failure. Second, the path he proposes is so vague that it is clear he hasn't even thought it through. He promises tax cuts for everyone, permanently, and yet promises to continue to feed the military-industrial complex as though we were fighting the communists in a cold war. That path is unworkable, and will only be achieved, again, on the backs of ordinary Americans. Romney intends to voucherize Medicare, repeal Obamacare, privatize Social Security and otherwise put ordinary Americans in a situation where they have everything to lose and very little to gain.
For months, many tax experts have been saying that even what is known about Romney's plan--skimpy as it is on any real information--shows that it is unworkable. One of Romney's sometimes advisers finally sort of acknowledged that. Kevin Hassett (an American Enterprise Institute propaganda tank "expert" who coughs out Friedmania economic assumptions as though they were clearly settled laws of nature) admits that unless there is a "broadening of the tax base" Romney couldn't reduce rates by 20% across the board in a revenue-neutral way.
Now, "broadening of the tax base" in connection with reduced rates was possible back inn 1986 when we had maximum rates much higher than today. But most broadening that should be done won't be done, because there is no political will for it in Washington either because Romney won't favor it or because the Tea Party crazies won't. (We won't be eliminating the capital gains preference under a Romney administration, for example, or eliminating the tax subsidies that we give to Big Oil and other extractive industries that make oilmen billionaires--like letting them get the "domestic manufacturing deduction", which they currently are able to use to reduce their US taxes even more.) Hassett admitted that "if you think the base broadeners don't add up, if you think that he can't get [top rates down] to 28%, well then the right thing that would happen, as you know if you're going to have revenue neutral reform, is that they would have a different change in rates." BNA Daily Tax RealTime (Sept 24, 2012 at 7:19 pm).
Hmmm. IF Romney listens to reality and IFF he is intent on making any tax change "revenue neutral" than maybe he wouldn't give an across-the board cut of 20%. But maybe Romney won't "do the right thing" and instead will be so intent on making sure the elite get the additional juicy tax cut they want that he will cut rates anyway. The result would be, as Harvard Professor Lieman indicated, an increase in the deficit and an increase in the debt.