As is now well understood, President Obama cannot campaign for re-election on his record, so he and his liberal allies are advancing class envy and division. Epitomizing this approach, New York Times columnist Paul Krugman wrote a column earlier this week charging that the election is about “the rich versus the rest,” suggesting that Mitt Romney’s policies would favor the rich and hurt the poor and middle class. While this critique of Romney’s policies may be politically astute, it isn’t supported by the facts.
The story so far: Former President George W. Bush pushed through big tax cuts heavily tilted toward the highest incomes. As a result, taxes on the very rich are currently the lowest they’ve been in 80 years.
This is deeply misleading. Before the recession and five years after the second round of Bush tax cuts, tax revenues were around the historical average of 18 percent of GDP. Current economic projections show that once the economy recovers, revenues will level back to that historical average. In other words, tax rates are currently low because of the recession, not because of the Bush tax cuts. Factcheck.org confirms this, adding that while it’s true that federal tax rates have declined for all income levels, “the only group for which rates did not reach a 30-year low in 2009 was households in the top 1 percent of all earners.” So “taxes on the very rich” are not “currently the lowest they’ve been in 80 years.
Krugman follows that misinformation by averring that “President Obama proposes letting those high-end Bush tax cuts expire; Mr. Romney, on the other hand, proposes big further tax cuts for the wealthy.”
Romney would cut taxes for the rich, but he would do so for everyone else, too, with a 20 percent across-the-board rate reduction. To imply that this favors the rich but hurts the poor is Orwellian: For the left, equal treatment for all (in this case, equal rate reductions for all) is really unequal and unequal treatment (cutting rates for some, but not for others) is really equal. But if Krugman were to note the reality, it would expose the vacuity of his theme.
He then asserts that lowering marginal rates while closing loopholes would disproportionately affect the poor and middle class. While Romney hasn’t made public which exemptions and deductions he would close, many of them — such as the mortgage interest deduction — disproportionately benefit rich people, so closing them would, if anything, disproportionately affect the rich.
Romney’s tax plan also calls for eliminating “taxes for taxpayers with Adjusted Gross Income (AGI) below $200,000 on interest, dividends, and capital gains.” According to Gallup, 54 percent of Americans own stock. So Romney’s investment tax cuts would benefit lots of middle-class Americans. His plan also calls for eliminating the Alternative Minimum Tax, which increasingly smothers middle-class families.
“Perhaps in a better world we could count on the news media to sort through the conflicting claims,” Krugman writes later in his piece. “In this world, however, most voters get their news from short snippets on TV, which almost never contain substantive policy analysis.”
Nor, in this case, does the analysis of a certain New York Times columnist.
David Weinberger previously worked in communications at The Heritage Foundation. He currently blogs near the Twin Cities in Minnesota.