As soon as you thought you’d finally had a chance to catch your breath from last week’s Republican debate, the candidates were at it again Monday at CNN’s Tea Party Debate. As you may have to come to expect from anything associated with the Tea Party, the debate was heavy on misinformation about tax policy.
Here are some of the tax-related highlights and missteps:
Former Massachusetts Governor Mitt Romney made misleading statements about President Barack Obama’s tax record, claiming that Obama “had raised taxes $500 billion.” What’s deceptive about this is that while Obama raised taxes by $500 billion dollars (mostly through the progressive tax included in the healthcare reform bill), he has simultaneously cut taxes overall by more than double that. Specifically, Obama cut taxes by $243 billion as part of the economic recovery act in 2009, $654 billion as part of the tax compromise he signed at the end of 2010, and is now proposing $240 billion in additional payroll tax cuts, to say nothing of his proposal to continue 81 percent of the Bush tax cuts and other smaller tax cuts at a cost of an additional $3.5 trillion.
Later in the debate however Romney got it right when asked by a member of the audience if he supported the so-called Fair Tax (a proposed national sales tax). Romney expressed skepticism toward the proposal saying that it would decrease taxes for the “very highest income folks” while increasing taxes for “middle income people.” An analysis by the Institute on Taxation and Economic Policy confirms this point showing that a Fair Tax would primarily benefit the super-wealthy, while increasing the taxes paid by the bottom 80 percent by more than half.
While rejecting the radically regressive Fair Tax may seem like a logical move for any presidential candidate who wants to be taken seriously, Romney is actually bucking at least half of the Republican field (and most notably current front-runner Texas Governor Rick Perry) who have come out in favor of it.
Minnesota Rep. Michele Bachmann attempted to rewrite fiscal history by claiming that the reason the deficit went “up and up and up” during the past decade was not due to the Bush tax cuts, but rather trillions in increased spending. In reality however, the Bush tax cuts were the primary driver of the deficit during the Bush years, adding some $2.5 trillion to the deficit from 2001-2010.
Bachmann went on to call for a tax repatriation amnesty, making herself the latest of the GOP presidential candidates (joining with Herman Cain and Rick Santorum) to explicitly call for a tax amnesty during the debates. Bachmann and the other candidates all claim the amnesty will create jobs, though in reality it will actually encourage companies to move more jobs and profits offshore.
Former House Speaker Next Gingrich brought up the topic of General Electric’s negative corporate tax rate in attempt to bash Obama’s choice of GE’s CEO Jeffrey Immelt as an adviser. Gingrich’s goal was to score points by arguing Obama’s choice of Immelt contradicts his own call to close tax loopholes.
Gingrich proceeded to contradict his own argument by saying that he is “cheerfully opposed” to raising taxes by closing the sorts of corporate loopholes that benefit GE and other corporations, while also conveniently leaving out that he actually works as an advisor to GE.