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Right Turn
Posted at 12:00 PM ET, 04/11/2012

Romney vs. the Buffett rule

Going into general election mode, Mitt Romney’s team staged a press conference call to discuss the Buffett Rule. CKE Restaurants CEO Andy Puzder, Romney economic policy adviser Kevin Hassett and Romney campaign policy director Lanhee Chen put forth the Romney message: Obama want to raise taxes, and that’s his economic plan.

From the onset, Andy Puzder voiced “frustration” that after the weak recovery the president’s first big policy push was for more taxes on the rich. Both Hassett and Chen stressed this is poor tax policy, making the code less transparent and more complicated. They took issue with what they called Obama’s reversal of decades of bipartisan tax policy that has sought to maintain the lower rate for capital gains. With a shot at Warren Buffett they pointed out that the Buffett Rule exempted municipal bonds, in which Berkshire Hathaway Inc., invests heavily.

I asked what their reaction is to president’s claim that income inequality retards economic growth. Hassett said there is a large body of economic work suggesting there is no correlation, and that a recent MIT study suggests the opposite is true.

I then asked if Romney’s tax plan would increase or decrease progressivity. Chen stated that the plan would “broadly preserve” current progressivity. He explained that both progressivity and revenue neutrality would be achieved by phasing out deductions for top income earners while lowering rates for all tax payers. Puzder made the interesting suggestion that income inequality has increased in part by individuals changing their “C”corporations to “S” corporations to take advantage of the lower rate for individuals.

The bulk of the questions concerned the Romney claim that Obama’s economy has hurt women much more than men. The campaign previously asserted that since Obama took office 92 percent of the jobs lost have been by women. As reporters pressed the Romney team, Chen essentially boiled down the claim to this: The Obama economy has been rotten and has disproportionately harmed women. (He says that, of the jobs regained, only 1/8 have gone to women.) Romney is not proposing specific pro-women economic policies, but is arguing that by undoing the damaging economic policies of the Obama era women will benefit.

The call was revealing on two fronts. First, the Romney team seems perfectly happy to fight on the issue of income inequality, recasting the issue as one of soak the rich vs. pro-growth economic policies. Second, the Romney team will need to temper and make sure their allegations are defensible and, by campaign standards, accurate. They are on the big stage now and the press will, correctly so, go after them for exaggeration and/or inaccuracy. Let’s just hope the press does the same where the president is concerned.

By  |  12:00 PM ET, 04/11/2012

Categories:  Economy, Taxes

 
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