Susan thinks Romney is hiding a secret-but-coherent tax plan that involves a value-added tax. Her theory is that Romney can make all the budget numbers add up with the VAT, but can’t push for a VAT right now because of … something. What that something is, I’m not sure.
The instinct, of course, is to say he’s hiding the VAT because he knows he’s going to face significant opposition from the right. And it’s true that conservatives who subscribe to the “starving-the-beast” theory of budget management fear that a VAT tax will, in the words of The Economist, “award[] the beast a lifetime pass to the Golden Corral.” (On an unrelated note, Golden Corral has delicious yeast rolls.)
But conservatives have become more accepting towards the idea of VAT lately. The Republican Party, for instance, seemed to allow for just such a tax in its most recent platform. Obviously, that doesn’t mean that the people like the folks at Cato are going to start embracing the VAT, but they don’t ever really seem open to any type of revenue enhancement, anyway.
So if Republicans don’t really hate the VAT as much as they used to, why is Romney hiding it?
Well, as I told Susan last night: I suspect he isn’t. I don’t think there’s a secret VAT. To me, this is likely just political pragmatism on the part of Romney; he doesn’t want to risk alienating part of the electorate by threatening to cut their favorite deduction. It’s the same reason why politicians promise to balance the budget without identifying particular programs to cut: a balanced budget in the abstract is awesome, but nobody wants to cut any specific program. Nobody. So Romney doesn’t offer specifics so as to avoid pissing anyone off, and he wraps it in platitudes about “waiting to work with the Democrats” and such.
Sometimes politics is just politics. No deep thinking necessary.
-Michael
“I know it is wet
And the sun is not sunny.
But we can have lots of good fun that is funny!”
“I know some good games we could play,” Said the VAT.
“I know some new tricks,” Said the VAT in the Hat.
“A lot of good tricks. I will show them to you. Your mother
Will not mind at all if I do.”
I still think my interpretation is kinder to Romney than is the alternative. Which is that Romney is deliberately making shit up, and using random statistics that have absolutely nothing to do with his actual policies, to support his claims that his tax plan is Obviously So Much Better Than Obama’s Because I Say So.
And normally I’d agree that Occam’s razor would suggest “a politician is lying” to be the most probable explanation.
But: (1) Romney is already on the record saying he doesn’t want to publicly admit his affections for a consumption task; (2) the currently-known numbers from the Romney tax plan would fit pretty much seamlessly with existing propositions for a VAT/income tax hybrid system, and would also dovetail nicely with some of his tangential tax policy soundbites; and (3) Romney’s focus has very frequently been on tax reform as a distinct matter from tax rates, and yet none of the specifics of his tax plan that he has identified actually suggest any substantive sort of tax reform, only mild tinkering — so why does he keep going back to harping on tax reform, if there isn’t some kind of tax reform in his agenda? Romney’s plan for job growth is self-evidently not a tax reduction, but a change to the method of taxation used — because a plan that is “revenue neutral” cannot, by definition, be a tax break for everyone, or leave more money in the private sector. Romney is not going to lower taxes, he’s said so himself. So if there is going to be any kind of economic benefit to his plan, it has got to be an efficiency gain from a restructured tax system. And the only way you can get there, based on what we know from the Romney plan so far, is by transitioning to a hybrid federal taxation system.
And I know I’m probably being completely naive in saying this, but I have a hard time accepting the assumption that Romney’s oft-discussed tax plan really is the house of cards it appears to be. Would Romney-the-CEO really be willing to advance and stridently defend a “tax plan” that he knows is just a bunch of hocus pocus, that has no basis in reality? Really? …. Okay maybe, but if so he’s fooled me. But he is awfully committed to the charade.
At the first debate, he very much appeared to be genuinely defending the merits of his tax plan, as if the skepticism was a personal affront: “My plan is not like anything that’s been tried before;” “virtually everything he just said about my tax plan is inaccurate.” And look at the language Romney uses in his ‘Plan for Jobs and Economic Growth’: “Mitt Romney will push for a fundamental redesign of our tax system” that “promotes savings,” and adheres to the idea that “Americans, to the maximum extent possible, should be able to keep the money they earn.” Tax should be “collected by a system that is simple and fair,” and “causes the least possible disruption.” Note to mention: “Where reforms that simplify the code or encourage growth have the effect of increasing the tax burden, they should be offset by reductions in marginal rates.” And not to mention, “[Romney] will also explore the possibility of coupling further rate reductions with measures that broaden the income base and simplify the rules to ensure that American businesses will always be competitive in the global economy”?
Everything Romney says about his tax plan looks exactly like a guy that’s playing a game of Taboo, and he’s drawn the card with “consumption tax” written on it.
And aside from all that: Romney picked Paul Has-A-Man-Crush-on-the-VAT Ryan for his VP.