Yesterday, the Senate approved the tax deal that President Obama negotiated with Congressional Republicans by an 83-15 vote. The legislation now moves to the House, where Democrats are saying that they might tinker with the estate tax cut that Republicans are insisting upon.
But it isn’t only on the left that opposition to the deal exists. A few House Republicans have disparaged the deal for including too few tax cuts and too much help for the jobless. In a USA Today op-ed today, former Gov. Mitt Romney (R-MA) — who is consistently mentioned amongst GOP 2012 hopefuls — came to the same conclusion, saying that a two-year extension of all of the Bush tax cuts is too short, while a one-year extension of unemployment benefits is too expensive:
One thing is certain: While we cannot rebuild our flawed system [unemployment insurance system] overnight, we are surely not required to borrow the funds to pay for it. In spending $56.5 billion to extend benefits, the deal is sacrificing the bedrock Republican principle that new expenditures be paid for with offsetting budget cuts.
Romney also criticizes the deal’s payroll tax reduction for adding to the deficit. But then, in order to get around the fact that he favors permanent extension of the entire Bush tax cut package (at a cost of $4 trillion over the next decade), Romney asserts that such an extension will actually increase revenues:
In many cases, lowering taxes can actually increase government revenues. If new businesses, new investments and new hiring are spurred by the prospects of better after-tax returns, the taxes paid by these new or growing businesses and employees can more than make up for the lower rates of taxation.
When it comes to the Bush tax cuts, revenue surely did not increase. In total dollars, the government collected about $1 trillion in income tax receipts in 2001, according to the Office of Management and Budget. This fell below one trillion for the next five years following the Bush tax cuts, not climbing above that level again until 2006. In 2000, the government collected 10 percent of GDP in personal income taxes, a percentage that has never again been reached.
Romney is twisting himself in circles to justify his opposition to the tax deal on fiscal responsibility grounds, while simultaneously advocating for a full extension of the Bush tax cuts, no matter their effect on the deficit. This should once again call into question why Romney has a reputation as the GOP’s go-to-guy on the economy.