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Tuesday, October 30, 2012

Romney's Regressive Plan for Social Security

Via email:

The Best Political Case Against Romney (Which Obama Hasn't Made): Probably the election's biggest shocker is the Obama campaign's virtual silence on what is Democrats' single best issue and, as this Bloomberg piece explains, the clearest proof that Romney's agenda puts the wealthy over the middle class.
Bloomberg explains that Romney's Social Security plan puts 10 times the burden on the middle class than it does on the rich. While all the focus has been on explicit tax bills, Romney's Social Security plan is like a $1,000 tax hike for a $45k/year worker, or 2.3% of wages. That's 10 times the implicit 0.23% tax hike for a $1 million earner.
This goes a long way to explaining why Romney is leading on the economy; Obama has been so focused on the invisible parts of Romney's agenda, he has never pointed out the smoking guns that would have -- and still can -- destroy Romney's credibility as an advocate for the middle class.
Without the wealthy paying their fare share of a Social Security fix, it would be quite forceful to hit Romney's plan to raise the retirement age to nearly 70, which is OK for Mitt's banker friends, but not so much for police officers, miners and those who do physical work.
The kicker is that Ryan said at the VP debate the Romney's Social Security cuts hit the "wealthy" and Romney says they target higher income workers. This is simply false. The attached Bloomberg piece linked to above shows that the cuts would almost certainly hit the top 70% of earners -- as low as $30k/yr. Ryan made the same "wealthy" claim about his 2010 plan -- here at the 1:15 mark.
Romney's Social Security plan provides the substantive evidence that makes the rest of his agenda look suspect. Romney's carried interest loophole does the same thing in a way that is quite powerful: Instead of analyzing his plans, we can see his actions since he started running for president.
You may recall that when Romney started running in 2007, Democrats began trying to close this loophole that lets investment managers pay less than half the regular income tax rate on a big part of their compensation.
Keep in mind that Romney's top economist Greg Mankiw wrote back in 2007 that preferential tax treatment of carried interest was unjustified. Further, even 3 out 4 on Wall Street say it is welfare for millionaires (Investment pros see Romney's tax break as welfare for the Mitt ).
So we know that Romney has netted millions from this loophole since he started running for president, while his rich donors have netted billions and it has cost the government about $15 bil.
Bottom line: Romney calls this deficit a "moral issue" yet he's been receiving millions in welfare for millionaires while calling for healthcare cuts for the poor and uninsured and calling for retirement age hikes for Social Security and Medicare. Though he is personally generous, it is mind-boggling that his moral compass has been pointing at everyone but himself and his donors.
Next, Romney must be the first presidential candidate in history running on plan to increase the number of uninsured -- by 45 million, according to a Commonwealth study. Getting rid of ObamaCare's backstop and hiking Medicare's retirement age will leave a gaping hole in the safety net that millions in the middle class will fall through.
When you add this all up and consider that Romney has been running for president for 6 years but won't reveal details of his tax, deficit, healthcare & immigration plans, it is clear that his assurances don't count for much.

[Let me add this from pgl at Econospeak: Social Security: Romney Rehashes Robert Bennett’s Regressive Plan.]

    Posted by on Tuesday, October 30, 2012 at 09:34 AM in Economics, Politics, Social Security | Permalink  Comments (40)


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