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Fortune: Missing from Romney's tax plan: Reality--a MUST READ!!
A stunning look at the REAL numbers.
Missing from Romney's tax plan: Reality
Even under the most generous economic assumptions, Mitt Romney's tax plan simply doesn't work.
By Cyrus Sanati
....Unfortunately for the Romney campaign, when you dig into the numbers, it looks like he will need a magician, not an economist, to help him implement his tax cuts if he is serious about sticking to his word to cut and balance the budget anytime in the next decade...
...So let's add up the efficiency gains and the spending cuts that Romney has identified during his campaign. There are the cuts in foreign aid ($100 million), public arts spending ($600 million) and family planning organizations ($300 million). All together these three "hot button" expenses add up to a whopping $1 billion in annual savings – basically a rounding error. He has also announced that he would try to equalize government worker pay to that of the private sector and "cut government waste," which Romney's campaign values at $47 billion and $60 billion in savings, respectively. In total, with a few other savings like privatizing Amtrak ($1.6 billion), reducing the federal workforce by 10% ($4 billion), reversing labor union rules ($11 billion) and reversing President Obama's health care initiative ($95 billion), the Romney campaign has identified a grand total of $219 billion in potential savings – a fraction of the $1.1 trillion needed to close the budget gap and less than a half needed to get him to within the 18% to 20% band.
Romney maintains that he won't make cuts to social security ($778 billion) or defense spending ($902 billion) and will continue to pay the interest on the national debt to avoid default ($225 billion). Just these three line items would cost $1.9 trillion, leaving just $564 billion left over for everything else. Health spending, Medicare and Medicaid, cost $864 billion this year, so Romney's proposed voucher system, which would replace President Obama's health care plan, would need to achieve $300 billion in annual savings for the budget to balance -- three times the amount expected.
But let's assume he solves the healthcare problems and is able to cut spending and maintain care (again a very generous assumption), there would still be nothing left over to pay for anything else. Not only would this entail unrealistic cuts in health care spending it also would require wiping out total federal support for education ($153 billion); all social welfare projects - including unemployment benefits ($452 billion), civil protection - including federal grants for local police & firefighters ($62 billion), all government agencies and regulators ($33.6 billion), transportation like interstate highway maintenance ($102 billion), and every other government program you can think of from stimulus funds to research grants ($199 billion). In this case, much of the $219 billion in saving the Romney campaign identified would ultimately not be necessary here because the government would essentially no longer exist....
Even under the most generous economic assumptions, Mitt Romney's tax plan simply doesn't work.
By Cyrus Sanati
....Unfortunately for the Romney campaign, when you dig into the numbers, it looks like he will need a magician, not an economist, to help him implement his tax cuts if he is serious about sticking to his word to cut and balance the budget anytime in the next decade...
...So let's add up the efficiency gains and the spending cuts that Romney has identified during his campaign. There are the cuts in foreign aid ($100 million), public arts spending ($600 million) and family planning organizations ($300 million). All together these three "hot button" expenses add up to a whopping $1 billion in annual savings – basically a rounding error. He has also announced that he would try to equalize government worker pay to that of the private sector and "cut government waste," which Romney's campaign values at $47 billion and $60 billion in savings, respectively. In total, with a few other savings like privatizing Amtrak ($1.6 billion), reducing the federal workforce by 10% ($4 billion), reversing labor union rules ($11 billion) and reversing President Obama's health care initiative ($95 billion), the Romney campaign has identified a grand total of $219 billion in potential savings – a fraction of the $1.1 trillion needed to close the budget gap and less than a half needed to get him to within the 18% to 20% band.
Romney maintains that he won't make cuts to social security ($778 billion) or defense spending ($902 billion) and will continue to pay the interest on the national debt to avoid default ($225 billion). Just these three line items would cost $1.9 trillion, leaving just $564 billion left over for everything else. Health spending, Medicare and Medicaid, cost $864 billion this year, so Romney's proposed voucher system, which would replace President Obama's health care plan, would need to achieve $300 billion in annual savings for the budget to balance -- three times the amount expected.
But let's assume he solves the healthcare problems and is able to cut spending and maintain care (again a very generous assumption), there would still be nothing left over to pay for anything else. Not only would this entail unrealistic cuts in health care spending it also would require wiping out total federal support for education ($153 billion); all social welfare projects - including unemployment benefits ($452 billion), civil protection - including federal grants for local police & firefighters ($62 billion), all government agencies and regulators ($33.6 billion), transportation like interstate highway maintenance ($102 billion), and every other government program you can think of from stimulus funds to research grants ($199 billion). In this case, much of the $219 billion in saving the Romney campaign identified would ultimately not be necessary here because the government would essentially no longer exist....
MORE:
http://finance.fortune.cnn.com/2012/10/16/romney-tax-plan/
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