Romney Economics

September 14, 2012 | By | 6 Replies More

This is insane. How can a guy running on the economy not read the work of an economist he is citing on the campaign trail? Romney’s definition of “middle class” is also astounding, given that only 2% of households have incomes of $250,000 per year. Alternet reports on a recent Romney interview:

Democrats say Romney’s plan would cause a $2,000 tax hike on the middle class – something Romney disputes and points to a number of studies that say his plan to cut taxes will not increase the deficit, including one by Harvard professor Martin Feldstein.

Feldstein says Romney’s math will work, but he would have to eliminate the home mortgage, charitable, state and local tax deductions for incomes greater than $100,000.

When I pressed Romney on that point, he conceded that he actually hadn’t read the Feldstein report that he and Paul Ryan cite on the campaign trail.

“I haven’t seen his precise study,” he said.

“I said that there are five different studies that point out that we can get to a balanced budget without raising taxes on middle income people. Let me tell you, George, the fundamentals of my tax policy are these. Number one, reduce tax burdens on middle-income people. So no one can say my plan is going to raise taxes on middle-income people, because principle number one is keep the burden down on middle-income taxpayers,” he said.

Romney defined middle income as $200,000 to $250,000 a year and less.

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Category: Economy, Politics

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

Comments (6)

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  1. Niklaus Pfirsig says:

    And to draw attention to yet another factoid, taxes are based on adjusted income, meaning that based on IRS figures, a lot of those multimillionaire get refunds.

    Ronald Reagan, one year had a gross income of over $1,000,000 and an adjusted income of $0. There were over 100,000 individuals in the top 2% income group with adjusted incomes of 0 in 2011.

  2. Adam Herman says:

    $250,000 or less is currently the widely accepted beltway definition of middle class. Romney was not stating anything new here. Obama says that’s middle class, Congressional Democrats say that’s middle class.

    Anyone in the media who dings him for this is cynical in the extreme, or misinformed.

    There’s a reason why we define $250,000 and below as middle class now. It’s because any other measurement would result in a whole bunch of voters getting their taxes raised. So the politicians say they are middle class so that they can promise to only raise taxes on the top 1%.

    Then there’s the fact that if you accept a lower threshold, say $150,000, you’d run into a situation where there are more rich people than poor people, and politicians wouldn’t know how to talk about that. The rich are whoever the top 1% is. Everyone else is poor or middle class.

    • You make good points, but in the end it just throws a spotlight on the inanity of public policy stats. Granted, 200K is, statistically speaking, the median income. But partly that’s because the far end of affluent is WAY off the charts. What so-called “Middle America” lives on is substantially less than $200K a year and this is why these conversations get bogged down in useless finger-pointing. The better question (though this also is fraught with problems) is What does the vast middle of the population make and it is likely more like 40 to 60K for a family. These people consider themselves Middle Class—because of what they have (house, two cars, maybe a college fund for the 1.6 kids) rather than how well they could survive a prolonged lay-off—and they get very frustrated listening to people like Romney tell them they’re poor or, conversely, that they aren’t affluent, which means that they fit neither classification. (I recall in the 90s my father getting incensed over a tax increase he got after Clinton announced a tax break for working class families. When I told him my taxes went down, he was dumbfounded. I had to gently explain that I was in that tax bracket, not him—he made a lot more than I did.) There has to be a better way to chart this and explain it. But Romney’s certainly not the first one to assume that people who count make more than most Americans. Bush Sr. famously criticized Clinton over proposed tax increases on anyone making over 90K. “You know who that is?” Bush asked. “Anyone with a job!” I thought, “Are you that disconnected? Seriously?”

  3. Adam Herman says:

    It’s not anyone with a job, but it’s a lot of people. A lot of voters, especially. Something like 25% of voters back then made over $90,000. Not easy to win an election promising to raise taxes on that many people these days.

    Heck, when you promise to raise taxes on 5%, that’s pretty much the end of your candidacy. For better or worse, this government will from now on be financed primarily by the rich. Which means government will have to get a lot smaller.

    • I’m not here saying whether it’s good or bad, but the smaller government gets the more power large corporations will have. I don’t see why this isn’t recognized now that in some instances corporations of a certain size are de facto governments in their own right. Why so-called “conservatives” seem to have no problem with that is one of puzzles of the present reality.

    • Erich Vieth says:

      Mark, I agree. Sometimes I think of America’s larger corporations as the de facto members of the de facto Congress that runs the country.

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