Senator Marco Rubio spoke out in favor of Mitt Romneys’ tax plan ahead of the second presidential debate, albeit without getting into details.
The top Romney surrogate told a group of journalists today, “There will be a very helpful debate about whether things like the charitable deduction, the health insurance premium, the home interest deduction should be part of the deal.” The senator then went on to say, “Do you really want to hurt charitable giving in a country when you are saying that you want to rely less on government and more on private institutions to deal with these issues? And how are you going to raise taxes on people on their health care premiums when you are saying you want there to be a system in place where folks can have more control over their own money?”
Our very own Last Word host, Lawrence O’Donnell, asked Rubio what tax deductions he would eliminate. The senator was at a loss for ideas. O’Donnell tweeted:
I just asked Sen Rubio if he could name one tax deduction he would eliminate. He couldn’t.
— Lawrence O’Donnell (@Lawrence) October 16, 2012
The lack of transparency regarding which deductions should go isn’t the only problem for Rubio and Romney. The Romney camp has consistently said a 20 percent across the board tax cut can be revenue neutral if there a significant number of deductions are eliminated from the tax code. The problem is, what deductions do you cut? And will that really pay the bill? A recent report by the Joint Committee on Taxation suggested that the answer to that second question is probably no.
Rubio agreed with Romney that lower tax rates are the best way to spur the economy. Not everyone, though, is on board with this premise. Bruce Bartlett, who held senior policy roles under both the Reagan and George H.W. Bush administrations, argued “the idea that tax reform will jump-start an economy suffering from the after-effects of a cyclical downturn is nonsense. This can be illustrated by looking at the impact of the 1986 tax reform.” Bartlett explained, “By the mid-1990s, it was the consensus view of economists that the Tax Reform Act of 1986 had little, if any, impact on growth. … it appears that even in a best-case scenario in which the top rate comes down a lot—the 1986 act lowered the top rate 22 percentage points from 50 percent—the real economic effects are at best very modest … even if Mr. Romney’s plan is enacted as proposed the growth effect will be small to nonexistent.”
At the end of the day, without specifics on which deductions will be eliminated in order to pay for the Romney tax cut plan, there’s no real way to score the cost. I’m sure that point is not lost in the Romney world.
Joanne Denyeau