In 1980, the year Ronald Reagan was running for president, the annual deficit was 2.7 percent of GDP. In 2000, the year George W. Bush was running for president, the deficit didn’t exist. This year, the deficit is projected to reach 7 percent of GDP. That’s a problem for President Obama. But it’s also, in ways that are not yet fully appreciated, a problem for Mitt Romney. It’s why the combination of his tax returns and his tax plan are proving so tough for him.
Large deficits raise one question: Who will pay to close them? Romney’s tax returns and his tax plan give an unusual, and not particularly popular, answer: low-income Americans and seniors.
That’s a tough sell. When Reagan ran for office, deficits weren’t a major problem. When Bush ran for office, they weren’t a problem at all. That’s part of why their tax cuts appealed to the electorate: They seemed affordable, even free. But Romney is running for office at a time when both new spending and new tax cuts will clearly require commensurate sacrifice elsewhere in the budget. And his tax cuts, as a percentage of GDP, are three times as large as Bush’s 2001 tax cuts. So put his returns and his cuts together and Romney is saying that, at a 15 percent effective federal tax rate, people like him are paying too much to close the deficit, and one of his policy priorities will be making sure they pay less going forward.
Romney isn’t offering free money this year. He’s offering a redistribution of anticipated sacrifice. And he’s redistributing away from his class and toward groups that are less able to bear it financially, and more sympathetic to most voters.