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Right Turn
Posted at 11:14 AM ET, 08/29/2012

Debt, details and double standards

The media are extremely focused on extracting from Mitt Romney and his surrogates the base broadeners (i.e., the deductions and credits he’ll take away) that would keep his tax reform plan revenue neutral. Is it leadership to hide the ball? Don’t the voters deserve to know? Doesn’t he need to fess up in order to claim a mandate? My, I must have missed the part of the campaign when President Obama laid out any individual tax reform plan (aside from raising taxes on the “rich” and small businesses). Oh yes, he never has. Nor has the president stepped up to the plate on entitlement reform.

Don’t get me wrong, I think it helps to give some detail. It certainly helps Romney when he explains what is in his long-term fix for Medicare and what is in the president’s long-term fix (nothing). But Romney has laid out more detail on more policies than any candidate has (certainly more than Obama and Sen. John McCain [R-Ariz.] did in 2008) in memory. He told us, on fiscal issues alone, that he wants to reduce the federal workforce by 10 percent, limit the cost of the federal government to 20 percent of GDP, go to a Medicare premium support plan, get rid of cost-inflation items like the Davis-Bacon law (which forces government contractors to pay union rates), go back to pre-Obama discretionary spending levels, block-grant Medicaid and extend the retirement age for Social Security and adjust the cost-of-living raises for wealthier retirees. Obama has done nothing remotely close to this. In 2008, he got by on “I’ll go line by line through the budget.”

Moreover, not even the sainted Simpson-Bowles debt commission picked out the specific tax reform base broadeners. Just like Romney, the debt commission report suggested a menu of limits on upper income earners’ deductions. The exact language from the Simpson Bowles Dec. 1, 2010 report reads as follows:

[T]the Commission recommends requiring the House Committee on Ways and Means and the Senate Committee on Finance, in cooperation with the Department of the Treasury, to report out comprehensive tax reform legislation through a fast track process by 2012.
The Commission proposes tax reform that relies on “zero-base budgeting” by eliminating all income tax expenditures (but maintaining the current payroll tax base, which should be modified only in the context of Social Security reform), and then using the revenue to lower rates and reduce deficits. The revenue from eliminating tax expenditures should be dedicated to three clear purposes: 1) substantially lowering marginal tax rates; 2) reducing the reduction; and 3) supporting a small number of simpler, more targeted provisions that promote work, home ownership, health care, charity, and savings. As a matter of principle, tax reform must increase or maintain progressivity.
A “zero plan” could reduce income tax rates to as low as 8%, 14%, and 23%. Even after adding back a number of larger tax expenditures, rates would still remain significantly lower than under current law.

Specifics from Simpson-Bowles? Nope. “Congress and the President must decide which tax expenditures to include in the tax code in smaller and more targeted form than under current law, recognizing that any add-backs will raise rates.” It then simply lists deductions that should be retained. (“Support for low-income workers and families [e.g., the child credit and the earned-income tax credit]; mortgage interest only for principal residences; employer-provided health insurance; charitable giving; retirement savings and pensions.”)

The level of detail demanded by the media is unbalanced (Obama gets by with no entitlement plan, no individual tax plan and no budget that gets the deficit under $1 trillion a year) and unrealistic. This is, after all, an election. Romney has already walked out on a limb on the third rail (Medicare), so to expect him to come up with a level of detail that months and months of work by a bipartisan debt commission never did seems unreasonable.

You could be cynical and say this is all a function of media bias, an effort to extract details from the Romney camp that will freak out the electorate. Or you could say the only remote hope of getting granular detail in this race comes from ferreting it out from the Romney camp. (In a similar situation: Regarding Middle East news coverage, the open Israeli society allows for critical reporting, unlike the closed, authoritarian regimes that surround it. The end result is that the despots get a pass from journalists.) What is missing, however, is the context and the comparison to the entirely negative, content-less Obama campaign. Perhaps it will come up in the coverage of the Democratic National Convention. One can only hope.

By  |  11:14 AM ET, 08/29/2012

Categories:  Taxes, 2012 campaign

 
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