Sunday, November 01, 2015

The Big Marco Rubio Tax Policy Lie That's Leading To The End Of Reince Priebus' RNC Chairmanship


We started the day off with a discussion of the latest criminal billionaire, Paul Singer, to join Team Marco in the rush to capture the White House. Since then I've had a slew of e-mails complaining that there was no explanation of the Rubio lies about his economic agenda. I can't believe I have to delve into the Rubio cesspool again so soon but... here goes. In fact, let's start with one of the few right-wing writers worth reading, Byron York at the website. York's been around right-wing circles long enough to know when a low-life like Rubio is lying his ass off to protect himself. He took a closer look at John Harwood's much maligned question to Rubio on Rubio's tax plan, the question that started all the fuss about the moderators. Remember, Breitbart was just one of a multitude of right-wing propaganda sites that insisted that "Harwood was caught outright lying in a loaded question to Sen. Marco Rubio." But that isn't remotely true. Harwood was being absolutely above board and it was, of course, Rubio who was twisting the truth into an unrecognizable form, as he often does. York:
The critics contend Harwood lied when he said to Rubio that the Tax Foundation "scored your tax plan and concluded that you give nearly twice as much of a gain in after-tax income to the top 1 percent as to people in the middle of the income scale."

Rubio denied it. "You're wrong," he told Harwood. "In fact, the largest after-tax gain is for the people at the lower end of the tax spectrum under my plan. And there's a bunch of things my tax plan does to help them."

You can see the full exchange below, but that is the crux of the issue. "Harwood accused Rubio of offering a tax plan that was heavily tilted towards the rich," the Federalist's Sean Davis wrote. "When Rubio corrected him and said that no, lower-income taxpayers receive a higher percentage of the plan's benefits than rich taxpayers, Harwood repeatedly argued with him…Guess what? Harwood got his facts wrong. Very wrong. Embarrassingly wrong."

Actually, Harwood's assertion-- that the Tax Foundation estimates that Rubio's tax plan would "give nearly twice as much of a gain in after-tax income to the top 1 percent as to the people in the middle of the income scale"-- was correct. The data on which both question and answer were based, is this, from the Tax Foundation:

It appears both Harwood and Rubio were using figures from the dynamic side of the table. Under those estimates, Americans in the top 1 percent would see a 27.9 percent increase in their after-tax income. The middle income brackets would see much less: a 17.2 percent increase for the 30%-40% decile of income, a 15.7 percent increase for the 40%-50% decile, a 15.3 percent increase for the 50%-60% decile, a 15.0 percent increase for the 60%-70% decile. Combine those groups into a broad middle, and the average increase is 15.8 percent. Just include the groups smack in the middle, and the average is a bit lower.

So: an average increase of 15.8 percent for the middle versus an increase of 27.9 percent for the top. The only thing to quibble with is Harwood's assertion that 27.9 percent is "nearly twice" 15.8 percent. The critics don't accept that characterization, but it seems likely that for many people, it's close enough. Harwood could have avoided the problem by saying "much larger" instead of "nearly twice," but the question as he posed it was hardly a lie.

By the way, if one looks at the Tax Foundation's static estimates, Harwood's question is not only accurate but understated. For example, the after-tax income gain of the top 1 percent is more than six times that of the 50%-60% decile.

Part of the controversy might owe to the way Rubio quite skillfully changed the premise of the question. Harwood asked about the contrast between the highest income group and middle income groups. Rubio answered by comparing gains in the highest income group with the lowest income groups. And indeed, the Tax Foundation estimates that the very lowest decile would see a 55.9 percent increase in after-tax income, compared to the 27.9 percent for the top 1 percent. So Rubio was right when he said that "the largest after-tax gain is for the people at the lower end of the tax spectrum under my plan."

But of course, that is not what Harwood asked. It would have been interesting to see Rubio address his decision to structure the plan in a way that would benefit top and bottom most, while awarding relatively lower benefits to the middle. But that's not what happened.

Below is the entire exchange between Harwood and Rubio.
HARWOOD: Senator Rubio, 30 seconds to you. The Tax Foundation, which was alluded to earlier, scored your tax plan and concluded that you give nearly twice as much of a gain in after-tax income to the top 1 percent as to people in the middle of the income scale. Since you're the champion of Americans living paycheck-to- paycheck, don't you have that backward?

RUBIO: No, that's-- you're wrong. In fact, the largest after-tax gains is for the people at the lower end of the tax spectrum under my plan. And there's a bunch of things my tax plan does to help them. Number one, you have people in this country that...

HARWOOD: The Tax Foundation-- just to be clear, they said the...

RUBIO: wrote a story on it, and you had to go back and correct it.

HARWOOD: No, I did not.

RUBIO: You did. No, you did.

HARWOOD: Senator, the Tax Foundation said after-tax income for the top 1 percent under your plan would go up 27.9 percent.

RUBIO: Well, you're talking about-- yeah.

HARWOOD: And people in the middle of the income spectrum, about 15 percent.

RUBIO: Yeah, but that-- because the math is, if you-- 5 percent of a million is a lot more than 5 percent of a thousand. So yeah, someone who makes more money-- numerically, it's gonna be higher. But the greatest gains, percentage-wise, for people, are gonna be at the lower end of our plan, and here's why: because in addition to a general personal exemption, we are increasing the per-child tax credit for working families.

We are lowering taxes on small business. You know, a lot of business activity in America is conducted like the guy that does my dry cleaning. He's an S corporation. He pays on his personal rate, and he is paying higher than the big dry-cleaning chain down the street, because he's paying at his personal rate.

Under my plan, no business, big or small, will pay more than 25 percent flat rate on their business income. That is a dramatic tax decrease for hard-working people who run their own businesses.

The other thing I'd like to make about our plan, one more point, it is the most pro growth tax plan that I can imagine because it doesn't tax investments at all. You know why? Because the more you tax something, the less of it you get. I want to be in-- I want America to be the best in the world for people.

HARWOOD: Senator, thank you.
For which Harwood was crucified by the right-wing media trying desperately to make sure Rubio is the GOP nominee-- and that the sense of right-wing victimization always reigns supreme:

Friday, Jonathan Chait asked simply, what should we believe: Marco Rubio or math in his "eerie reprise of George W. Bush’s 2000 strategy, which uses a combination of personal authenticity, small-bore policy concessions, and rhetorical misdirection to portray his conventionally Republican, supply-side policy agenda as a refreshingly moderate departure from party orthodoxy," although (and of course) "the brunt of Rubio’s fiscal pressure would come to bear on the minority of the federal budget that goes directly to the poor."
This is how Republican budget logic works in general. When you add up fanatical opposition to higher revenue, a political need to protect current retirees and a commitment to higher defense spending, you wind up either blowing up the budget deficit or inflicting massive harm on the poor. There are different ways to handle that problem. One of them is the Paul Ryan–circa-2011 plan of just proposing enormous cuts in anti-poverty programs. Another is the Paul Ryan–circa-2014-to-the-present plan of keeping those cuts in the budget but insisting they’re not your actual ideas.

Then you have the Rubio-Dubya method. The downside of this plan is that you don’t get Ryan-esque praise as a serious budget hawk who’s willing to look America square in the eyeball and tell us hard truths. But liberating yourself from any pretense to obeying the laws of arithmetic provides certain upsides that seem profitable for Rubio. You can give your party’s financial base the lucrative policy substance it craves, and craft your public message to the needs of the general election, by talking up your modest background. Bush in 2000 made a habit of taking photo opportunities with African-Americans all the time, a smart gambit that contributed to his image as a centrist. Rubio’s personal identity gives him a leg up in this regard. The only flaw in the plan is the possibility that reporters will focus on the substance of your agenda instead of the “signals” you send with your political messaging. If David Brooks is any indication, Rubio doesn’t have much to worry about.
And on that other little matter that came up during the debate, about Rubio's tendency to play fast and loose with money, Politifact looked into his well-rehearsed and self-righteous denials of financial impropriety and came to the conclusion that Rubio's full of crap:
Our ruling

Rubio said the premise of questions about his financial skills are "discredited attacks from Democrats and my political opponents."

He was responding to examples Quick gave when asking if he was prepared to oversee the nation’s economy as president. She listed troubles Rubio had experienced with campaign bookkeeping, foreclosure proceedings and liquidating an IRA at severe tax penalties.

All of these events happened and have been well-documented. It’s not accurate for Rubio to refer to the issues as "discredited," whether his opponents have used them to attack him or not. Quick was not making things up nor shading the facts.

We rate Rubio’s statement False.

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