"Former Treasury Secretary: Romney Tax Plan is ‘Daughter of Voodoo Economics’"
During an appearance at the Center for American Progress Action Fund, former Treasury Secretary Larry Summers offered a harsh analysis of Republican Presidential candidate Mitt Romney’s tax plan, saying we were in “uncharted territory of being wrong.” Summers also addressed the five “studies” the Romney campaign cites in support of its budget, two of which come from the Wall Street Journal. He said, “It’s a modest abuse of language to refer to a Wall Street Journal editorial as a study, much less two Wall Street Journal editorials.” (ThinkProgress addressed these studies here.)
Summers, who backed up the Tax Policy Center’s analysis that found the math of the Romney plan to be impossible, said the tax plan was the “daughter of voodoo economics,” riffing off the term George H.W. Bush used to describe Ronald Reagan’s supply-side economic policies:
SUMMERS: I’ve seen it where if you really parse the arithmetic closely and imagined what the CBO would do, the challenger’s errors were in the tens of billions of dollars. I’ve seen it where if you really parsed the errors, the challenger’s errors were in the hundreds of billions of dollars. This is the first time that the challenger’s errors have, on my accounting, been measured in the trillions of dollars. This is daughter of voodoo economics.
It’s easy to say that my plan is to eat ice cream sundaes and chocolate cake and hamburgers as much as I want. My plan is to lose 60 pounds. And my plan is to avoid painful exercise. And those are all my objectives and I’m committed to every one of them. You can do that, but it isn’t likely to get you — you don’t know quite where you’re going to go if you’ve got all three of those objectives.
I think what’s important to recognize, and I think what the nature of political discourse tends to lead one not to see, is that we’re sort of in uncharted territory of being wrong.
Romney says his plan would cut taxes “across the board” by 20 percent, and — by closing loopholes and eliminating deductions — would not contribute to the deficit. However, the non-partisan Tax Policy Center (TPC) says that if Romney closed every single deduction in the tax code — including those for home mortgages and charitable contributions — 95 percent of Americans would see their taxes increase. Those making more than $200,000, though, would see a net tax break.
It’s virtually impossible that these tax cuts would not substantially increase the deficit because, as TPC’s Roberton Williams observed, “Nothing comes to mind to broaden the tax base enough to pay for the lower rates.”
— Greg Noth