Disclaimer: This is an op ed piece and is based off of my own experience and opinions. My political affiliation is to the Centrist party but I do lean a little more to the left; please keep this in mind.
Update Notification: This article was updated on Saturday, October 13, 2012 @ 10:12AM.
Why the Romney/Ryan Tax Plan is not a Framework
We have heard throughout the last couple of months from both Governor Romney and Congressman Ryan about their tax plan. It is one of the key points in their election campaigns and the reason many Conservatives see the Romney/Ryan ticket as a plausible attempt to unseat incumbent Barrack Obama and Joe Biden.
This being the case a deeper look into this tax proposal is required and I think this is something that no one in the media has done their job on. This article is to compensate for that and to explain why I believe the title of this article. What do you think of when you heard the word 'framework'?
It is a word that Both Ryan and Romney have used several times over the past few days when describing their tax plan. Well let's start of with the literal definition of a framework from Merriam-Webster:
1 a : a basic conceptional structure (as of ideas) framework of the United States Constitution> b : a skeletal, openwork, or structural frame
3 : the larger branches of a tree that determine its shape
Quoted from: http://www.merriam-webster.com/dictionary/framework
So, let's compare each of these definitions to the proposal that has been put forth by the Romney camp. They basic claim is that they want to lower taxes 20% across the board and, without touching Middle Class tax deductions, not have this tax cut either add to the deficit or harm the Middle Class through removal of critical deductions. This is as far as we have gotten into the specifics of their plan and Ryan made a key point last night that they believe this is a framework from which Congress will fill in the blanks.
At first glance you might say that it fits definition 1a of a framework. This is a valid argument when taken on face value. This plan is a foundation of ideas to be built of off, however this also highlights what I am getting at but I will get to that later on. None of these other definitions fit the bill.
So, allow me to place into context what I believe 'framework' means from my unique prospective as a programmer. I will follow this up with a simpler example as I realize programming can be a complex topic.
In programming a framework is a set of code that has already been created and can be reused for its basic functions and still be easily modified to make each program unique. The code has already been created and is made to be easily modified. For example a graphics engine is an example of a framework. A graphics engine is what a 3D program uses to draw the landscape, textures, models, and other such things into the display area.
What it is not is a set of ideas. There is cold, hard code already in place; there is direction. From there you modify the code to fit your needs but you have something to start with that is physically represented and is not just an idea.
Now, the second example that perhaps more can relate to.
Think of a house while it is under construction. The first thing that is created is the blue print; this is the first stage. The blue print tells the foremen where they need to finish the project at, it tells them the goal. The second stage is the framework of a house where the required construction is completed. This includes things like wall and ceiling supports and is essentially the 'skeleton' of the house. Finally the 'facade' of the house is built: the walls, the roof, stairs, etc.
Now place the Romney/Ryan tax plan into each of these contexts. Governor Romney and Congressman Ryan have given us no specifics, no specific details; they have not told us exactly what deductions they will be modifying or removing from the Upper brackets. They have not told us which deductions they plan to remove, which does not affect the Middle Class, from the Middle and Lower brackets.
So far their plan states:
1. Cut all income taxes by 20%.
2. Find deductions and other areas that can be cut or modified and that will not hurt any economical class as a result
This is all we know. This is all they have told us. Some are saying, "Well this is specific enough". If a programmer went into a meeting with a client who was purchasing a framework from him or her and stated, "Well here are my ideas for your framework you can build it yourself" that programmer would find themselves being kicked out of that meeting, possibly sued, and having their reputation ruined.
What Ryan proposed last night at the VP debate was a plan that has a broad idea, but it does not impart specifics. What they have is not a framework, it is a blue print that has a specific goal in mind. It does not have a framework which states which deductions Romney/Ryan suggest to be removed it just stated a goal. The framework and the facade building are being left to Congress to figure out. What the Romney/Ryan plan is not an example of leadership. Their plan is an example of delegation; something Romney would be very familiar with. They have given Congress a task and said, "Now we delegate to you the responsibility to actually make our plan work". I concede that Romney has stated they will be involved in the process but we have also seen the progress made against headwinds when Obama was involved in trying to get the debt ceiling raised (almost nill at times).
I predict similar issues plaguing Romney and here is why. With the way Congress is right now do you honestly think this approach will work? Romney's plan hinges on two weak points and they are both on Congress:
1. That the House remains Republican controlled
2. That Republicans take over the Senate
If either of these conditions is not fulfilled Romney's plan does not get through Congress very easily and could easily mirror Obama's fight with Obamacare.
Now I am going to impart the only bit of non-opinionated information in this article. The Tax Policy Center is a non-partisan organization that examines tax code and proposals and provides analysis of those proposals. The TPC said of the Romney/Ryan plan that, without increased definition on which deductions Romney and Ryan will propose to be cut, their position on this plan, that it will not increase taxes on the Middle Class by removing critical deductions, is not tenable.
Here is another interesting bit of information about how the Romney/Ryan plan will affect federal revenues should it be implemented in its current form:
Because Gov. Romney has not specified how he would increase the tax base, it is impossible to determine how the plan would affect federal tax revenues or the distribution of the tax burden. TPC has analyzed instead the effects of the specified proposals in the Romney plan. These estimates provide a guide as to how much the base broadening would need to raise taxes in different income groups to achieve the plan’s targets.
TPC’s analysis measures the change in tax liabilities against two alternative baselines: current law, which assumes that the 2001-10 tax cuts all expire in 2013 as scheduled, and current policy, which assumes that the 2011 law is permanent (except for the one-year payroll tax cut and temporary investment incentives).3 Compared with the current law baseline, the Romney plan (absent base broadening) would cut taxes for about three-fourths of taxpayers by an average of more than $7,000. In contrast, compared with current policy, about 11 percent of tax units would see their 2015 taxes go up an average of nearly $900 while 70 percent would get tax cuts averaging almost $4,300. The tax increases reflect the expiration of three provisions enacted in 2009: the American Opportunity Tax Credit and the expansion of the earned income credit and the child credit.
Also in the absence of such base broadening, TPC estimates that on a static basis, the Romney plan would lower federal tax liability by about $900 billion in calendar year 2015 compared with current law, roughly a 24 percent cut in total projected revenue. Relative to a current policy baseline, the reduction in liability would be about $480 billion in calendar year 2015.
For my final words I want to impart some conventional opinions onto both far Leftists and far Rightists; this will be off topic for the topic of the article though. Being in the Center I do and do not agree with all of the stuff I read on Newsvine from both sides however being in the center gives you a bit of an impartial edge because you are able to see both candidates clearly and the policies for what they are.
Neither of these men, Romney nor Obama, will be able to balance the budget with their ideas. The reason is due to Congress in part and also due to ourselves as a nation right now. On the Left we have a lot of people that do not want to mess overly with Medicare and Social Security. Changes have to be made here, it is a point I have always agreed on with Republicans. We need some reforms for Social Security like the ones that Biden was apart of in the Regan administration; the retirement age should be increased and locked to the life expectancy of our nation.
Medicare needs to be dealt with. Next to Pentagon spending it is our largest source of expenditure in the budget. We need to find a way to cut it down without affecting Medicare recipients too much but at the same time people on Medicare need to realize that changes are needed, they will have to give up a little for the betterment of the Nation.
I do draw a line with education, however. My Grandmother was a teacher and my Father was also a History teacher as well as Principal and is currently a well known Special Education director in Arizona. I have worked at schools as well. I was part of the technology department while I was in high school and I worked for the technology department at the school system my Father works at. Education is the one thing we cannot afford to make cuts to overall. There is some room where waste can be cut but broad cuts across the Education system will only hurt our nation. We need smart reforms here, not generalizations.
Now, on the Right we have a different set of issues. First Grover Norquist. Here is a man that has single highhandedly assured that no reasonable and balanced deal will be reached. Taxes have to go up, they just have to. You cannot cut enough spending out of our Federal Government, preserve what we have in tax deductions and services, to balance the budget. Norquist has assured that no taxes will be raised by a Republican and that no Republican will vote for any legislation that contains them.
In Romney's own words:
I will not accept $1 in tax increase for every $10 in spending cuts
Secondly is defense spending. We spend, right now, more on our military than the top 26 spenders in the world combined. If we are outspending those nations 26 to 1 how do we not already have the strongest military on this planet? If we drop this to 10 to 1 how do we still not have the strongest military?
Romney is proposing to go the other direction. He want's to increase military spending by 2 trillion dollars. Where is he going to get this money from? If we do not have the money to continue funding Medicare and Social Security without changes why can we continue to find the military at the current levels plus another 2 trillion? The numbers do not add up.
I personally see no difference in Romney nor Obama on economics. Obama has the same policies as Bush did in some aspects while Romney will return to the Bush policies in full. I can effectively say they are tied in this aspect as far as my opinion goes on economics.
I do not think it is possible for either of them, with their proposed plans, to balance our budget without raising taxes nor reforming social programs and cutting the military. If they do not do all of these things the numbers do not add up. We have has a nearly trillion dollar deficit under Obama for each of the past four years. Romney wants to add another two trillion in spending on top of that. The winding down of the wars will add some revenue back into the Government however that added two trillion will wipe out those savings. Romney's plan does not present enough revenue to the Government to justify the statements he has made with that increased military spending.
Obama will continue the same amount of spending he has been doing during his first term. There will be some decreases as the wars wind down and some deals may be reached in Congress but for the most part it should stay relatively around the 800B to 980B mark possibly lowering down to 600B by 2016 according to the Congressional Budget Office.
Romney's plans will have around the same amount of spending based on the information we have right now about them and so that is why I say he and Obama are on the same field there.