Romney's Real Problem On Taxes

A blog about business and economics.
Sept. 10 2012 7:32 AM

The One-Sided Vagueness of Romney's Tax Plan

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NASHUA, NH - SEPTEMBER 7: Republican presidential candidate Mitt Romney speaks at a Victory rally at Holman Stadium on September 7, 2012 in Nashua, New Hampshire. After accepting the Republican candidacy at last week's Republican National Convention, Romney visits familiar ground in New England.

Photo by Kayana Szymczak/Getty Images

"Romney's Tax Plan Leaves Key Variables Blank" report Annie Lowrey and David Kocieniewski which is quite true. But I don't think vaguenss and lack of detail are the real problem with Romney's plan. The problem is that while being very vague about some things, he's been quite specific about others—namely the cuts in headline tax rates he wants to enact.

In a lot of respects I think modern presidential candidates are pressured into being too detailed about "plans" for different legislative areas. When it comes to legislation, what a president really needs is a plan to deal with congress. That means a legislative plan that's about directions. So if you asked me about my corporate income tax plan, I'd say that I'd like to lower rates and broader the base and try to raise slightly more revenue and how much rate lowering we can enact will depend on how many deductions and credits congress can agree to rescind. That leaves "key variables blank" but I think also makes it perfectly clear what kind of bills I would or wouldn't sign.

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Romney's plan isn't like that. It's not unclear, it's ambiguous. Enacting the rate cuts he wants and then fully making up the revenue would entail a large middle class tax hike. Enacting the rate cuts he wants and avoiding a large middle class tax hike would blow up the deficit. Those are pretty different policies and it's impossible to tell from the campaign thus far which one Romney is saying we should expect from him. Are we getting the Bush-style closet Keynesian, or will the new austerity fad continue on the right?

If you bracket distributional concerns, the policy case for the middle class tax hike version of the Romney plan is pretty strong. I, personally, don't think you should bracket distributional concerns. But does Romney?

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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