Bob Lord

Posted by Bob Lord [cross posted at Daily Kos]

On the eve of the first debate, Mitt finally has suggested how he'll recoup the lost revenue from his 20% across the board rate cut. And the answer is (drum roll) a $17,000 deduction bucket. Each taxpayer would be given a bucket holding $17,000 in itemized deductions that could be filled with itemized deductions like the mortgage interest deduction or charitable contributions.

Josh Barro at Bloomberg thinks it's a swell idea

I disagree. I'd say it reeks of desparation, is insipid in its design, is discriminatory, and is dangerously bad policy.

Posted by Bob Lord

At a debate last spring, the candidates were asked what one word best described them. Romney's response? "Resolute."

In a few respects, it's been hard to argue with that. He's been resolute in his refusal to release more of his tax returns. He's been resolute in his distortion of Obama's record. And he's certainly been resolute in his refusal to provide any specifics of his tax plan. 

On the refusal to provide specifics, Ryan is no less resolute than Mitt. Indeed, Ryan never has shared much by way of specifics in his "Path to Prosperity." And today, Ryan maintained resolute on sharing specifics of the Romney tax plan. He told Chris Wallace that "it would take too long to go through all the math." But, he assured Wallace, the plan would "drop taxpayers' bills by 20%, without costing a dime, due to closed loopholes." And he told Wallace that you can cut rates by 20% by closing loopholes and still have preferences for the middle class, including those for home purchases, charitable deductions and health care. 

Finally, to leave the audience utterly baffled, Ryan stated: "What we’re saying is people are going to get lower tax rates and therefore they will not send as much money to Washington.”

Posted by Bob Lord I received an email blast from a friend and staunch supporter of Proposition 121 yesterday. She's a moderate Republican turned Independent, so I can understand why the "top two primary" system is attractive to her.  But it's hard not to be suspicious. The Proposition is glaringly flawed in a way that … Read more

Posted by Bob Lord We shouldn't be surprised by Mitt's rank dishonesty anymore, but coming from someone who says he knows business, this one is a doozy. On 60 Minutes last night, in explaining why it's ok for him to be taxed at a lower rate than folks making $50,000 per year, Mitt dishonestly claimed: … Read more

Posted by Bob Lord

On "Real Time" last night, Bill Maher made a comment that went to something I've been ruminating about since Romney's 47% remarks went viral, something I've given a lot of thought to over the last five years. The focus of our discussion should be why the income of 47% of Americans is so low that they pay no income tax. 

Essentially, we are experiencing what I'll refer to as bracket creep upside down. Up until the '80s, Americans faced a phenomenon known as bracket creep. Although their incomes in real dollars were not increasing, but merely keeping pace with inflation, they'd feel as if their taxes were increased, because they would "creep" into higher tax brackets, because the brackets were defined in nominal dollars, not real dollars. For the most part, bracket creep was eliminated by the indexing of tax brackets to changes in the consumer price index. So, if your income simply kept pace with inflation and nothing more, your marginal tax bracket would stay the same. 

Since 1980, however, and especially since 2000, the incomes of most Americans have not kept pace with inflation (while the income of those at or near the top has skyrocketed). As a result, we're experiencing the opposite of bracket creep or "bracket creep upside down." As the tax brackets adjust to account for changes in the cost of living, the income of most Americans is not keeping pace with inflation. Thus, most Americans are creeping down the tax brackets over the years. Prior to 1980, nominal incomes increased due to inflation, while tax brackets remained constant, resulting in bracket creep. Since 1980, tax bracket inflection points have increased due to inflation, while incomes have not kept pace with inflation, resulting in bracket creep upside down. And, by the way, the stated level of inflation we've experienced, based on the consumer price index, almost undoubtedly is less than real inflation. For a discussion of this, read "Bad Money," by Kevin Phillips. If tax brackets had kept pace with the real level of inflation, over 50% of Americans would be paying no income tax.