Romney's Rx: Bad Medicine
Dear Gov. Romney:
I watched your smooth sales pitch Oct. 3. While it was quite astonishing for its dramatic departures from previous representations you made, I am still not interested in your product, Romney 10.5, or whatever version you are currently working on.
What I am interested in is a president who respects me enough to level with me about the important details of his agenda, the hard choices to be made and expected benefits. “Trust me” was not a good answer when given by Richard Nixon, and it is no better coming from you.
Even though I am not among the top one-hundredth of 1 percent of income earners, or by any other measure considered elite, I do have a mind and follow the issues. My citizenship is fully equal to your own.
I want to know which deductions and exemptions you propose to eliminate in order to offset a 20 percent reduction in income tax rates. How about completely exempting, say, the first $50,000 for everyone? That would ease the tax burden for most in the middle class. You could then reduce the marginal rate to 30 percent for all income over $250,000, with a break for small business and, by broadening the tax base, actually help close the budget deficit.
Of course, that would double your own effective tax rate, but you can better afford it than a family just barely scraping by. Why should income from hard physical labor be taxed at a higher rate than passive investment income? How can anyone making minimum wage afford any income tax at all?
It doesn’t seem credible that an off-Wall Street private equity mogul who has made his fortune capitalizing on the economic pressures facing middle-class workers over the past 30 years would be the person best suited for returning us to prosperity.
You have said that you enjoy firing people. As Matt Taibbi said in his Rolling Stone article last August, that must have come in particularly handy when advising corporations whom to lay off in order to afford the consulting fees and interest on the massive debt that you helped load them up with. Why should any creditor stand first in line in bankruptcy court — before workers who have invested entire careers accruing pension and health care benefits, who have no means of recovering from their losses?
Wages and benefits are the largest expenses facing most businesses. By outsourcing production overseas, wage rates have been driven down toward the minuscule levels found in underdeveloped countries. You can then pat yourself on the back for creating the new poverty-level jobs while absolving yourself of any responsibility for your role in destroying the old ones that provided a middle-class living.
No, sir, loss of American jobs, overseas outsourcing of production, offshoring of profits to reduce tax liability, corporate bankruptcy, reduction of wages, and elimination of pension and health benefits are not prescriptions for a thriving middle class.
With your financial background, you must fully understand the implications of your plan to close a $1.1 trillion deficit without raising taxes while increasing defense spending. Even if our economy were to grow 2 percent faster than the combined rates of inflation and population growth, much of any revenue increase would be gobbled up by rising interest on our debt.
If growth, net of interest, reduced the annual deficit to $900 billion, we would still need a 25 percent reduction in outlays to balance a $3.6 trillion budget. Since you plan to increase defense spending (currently 19 percent) and not to harm Social Security (21 percent) or Medicare (13 percent), and continue to pay interest on the debt (6 percent), the remaining 40 percent of everything we do must be cut back by over 60 percent in real terms to create a balance.
Many important programs would be devastated, including student loans, revenue-sharing to state governments, which helps pay teacher and police salaries, upkeep of roads, bridges and airports, disaster response, homeland security, basic research, the Centers for Disease Control, unemployment insurance, food stamps for the working poor, the care we owe our veterans and deposit insurance.
The resulting cancellation of government contracts would bankrupt many private businesses. The rise in layoffs by government agencies and the businesses that supply them would result in massive unemployment and erosion of the tax base.
Therefore, I suspect, unwilling to raise taxes and unable to make sufficiently draconian cuts in spending, you will supplement whatever severe cuts you are able to enact by continuing to run relatively massive deficits. The rich will get richer, the poor poorer, and the middle class will continue to disappear.
No, thank you.
Tom Goergen lives in Aberdeen. Contact him at tgoergen @nc.rr.com.
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