Mitt Romney Releases Exciting Smoke and Mirrors Tax Plan

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Mitt Romney has released his new tax plan, and it calls for a 20 percent across-the-board reduction in income tax rates, elimination of the estate tax, repeal of the AMT, and a 30 percent cut in the corporate tax rate. Not to worry, though. It’s designed to be revenue neutral because…it’s going to…um…something. I really don’t know how you get revenue neutral out of all this. I suppose by claiming that lower taxes will supercharge the economy and pay for themselves. That’s the usual wheeze, anyway.

Okay, so rich people will pay a lot less in taxes. But how about spending? Well, Romney says he plans to reduce spending by $500 billion in 2016. However, he doesn’t want to cut defense. He thinks that Medicare and Social Security reform should only affect “younger generations,” so he doesn’t plan to cut either of those either, at least not in the medium term. And interest on the debt is obviously outside his control.

So what’s left? Domestic discretionary spending. But Romney has no actual proposals here. He wants to repeal Obamacare, but Obamacare is fully funded and repealing it won’t save any money. He wants to block grant Medicaid, but that won’t save any money either. It’s just a different funding mechanism. And he wants government to operate more efficiently. Roger that.

So that still leaves us with $500 billion to cut out of the $1.7 trillion currently projected in domestic spending for 2016. How do you do that? Either with a 30 percent across-the-board cut or with smaller cuts to some programs and larger cuts to others. But which ones? Those are pretty big reductions. I wish guys like Romney had the guts to actually tell us where they want these cuts to fall, but they never do.

So this all seems like so much smoke and mirrors. But on the bright side, his plan for corporate taxes actually has some promise. In theory, anyway. He wants to lower the statutory rate, which would be okay if it’s done along with broadening the base. He wants to make the R&D tax credit permanent, which is a good idea. And he wants to shift to a territorial taxation system, where corporations are taxed only on the income they earn in the United States. With proper regulation, this is a perfectly fine idea too.

Now, in practice, Romney says he wants to broaden the corporate tax base but doesn’t say how, nor does he suggest any interest in the kind of rules it takes to make a territorial system work. But you never know. Those are potential negotiating points. It’s not impossible that Romney’s corporate tax plan could end up on the positive side of the ledger.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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