(MintPress) – As the Republican National Convention (RNC) gets under way, Republican presidential candidate Mitt Romney got a dose of the tone he’ll soon face when workers took to the streets of Tampa to protest against job outsourcing being exercised by Bain Capital. While sound bites about women’s health and sexuality have dominated the headlines of mainstream media, Romney will have to focus on what got him to the RNC in the first place: the economy. One of the RNC mainstays debuted on Monday was the national debt clock, which keeps a real-time tally of the $15.9 trillion national debt.
RNC chairman Reince Priebus said the running clock was a reminder to Americans how much debt current President Barack Obama had added onto the backs of the nation.
“This clock reminds every delegate and every American why we are here in Tampa – because America can and must do better,” Priebus said. “Every American’s share of the national debt has increased by approximately $16,000 during the current administration.”
But the clock also lends a hand to irony, as new calculations from Chicago City Colleges professor Paul Buchheit suggest that the taxes avoided by the rich would be enough to pay off the entirety of the national deficit over the next decade or so. Buchheit breaks up his findings into a multi-step platform to demonstrate that “withheld revenue, not excessive spending, is the problem.”
Buccheit says that financial gains could be accrued through individual and small business tax avoidance costing us $450 billion; corporate tax avoidance is between $250 billion and $500 billion; tax haven losses range from $337 billion to $500 billion; a non-regressive payroll tax could produce $150 billion in revenue and a financial transaction tax (FTT) of up to $500 billion.
Buchheit wrote that the U.S. could easily pay off its deficit while creating an unimaginable surplus while taking the pressure off the middle class if the rich paid in on their fair share of taxes.
“More importantly, the avoided taxes and a few other sensible taxes could provide sufficient revenue for job stimulus without cutting the hard-earned benefits of middle-class Americans,” Buchheit wrote.
A taxing debate
While the numbers can admittedly get a little convoluted and one has to be brushed up on their tax code terminology, Buchheit touches on an area of political contentiousness as it pertains to increasing taxes. Democrats and Republicans have long disagreed on tax policy, with Democrats advocating for a slight increase in taxes, usually on those making more than $150,000 a year.
Republicans argue that a tax hike on the rich would quell job creation, saying that those affected most would be small business owners, or America’s “job creators.”
But research from the nonpartisan Congressional Research Service shows that only 2.5 percent to 3.5 percent of small businesses would be impacted by the Democratic policy, something Urban Institute fellow Howard Gleckman said is overlooked by Republicans and oversimplified.
“The Republican claim that this is a tax increase on a large fraction of employers is just not true,” Gleckman explained. “It turns out most of the firms those politicians define as small businesses don’t hire or invest very much at all.”
Instead of evening the playing field of taxes, tax cuts for the wealthy have become commonplace since 2001, when then-President George W. Bush altered the tax code with the Economic Growth and Tax Relief Reconciliation Act in 2001 and the Jobs and Growth Tax Relief Reconciliation Act in 2003. The Bush-era tax cuts ultimately lowered the tax burden on America’s highest earners.
New data from the Congressional Budget Office (CBO), however, shows that those tax cuts could do more harm than good. Post-election debates on the issue could become heated, as the House has voted in favor of extending the tax cuts at the end of the year while Obama has vowed to shoot down the measure. The CBO says the expiration of the tax cuts could bring in nearly $1 trillion in much-needed revenue over the next decade.
If the Bush-era cuts were to be renewed at the end of 2012 and carried forth throughout the coming years, those tax cuts would account for nearly half of the country’s public debt by 2019, according to the Center for Budget and Policy Priorities (CBPP). By that point, tax cuts would be the single largest contributor to the nation’s public debt.
“[S]imply letting the Bush tax cuts expire on schedule (or paying for any portions that policymakers decide to extend) would stabilize the debt-to-GDP ratio for the next decade,” the CBPP wrote in a statement. “While we’d have to do much more to keep the debt stable over the longer run, that would be a huge accomplishment.”
It remains unclear of how Romney will campaign on economic issues. In stump speeches, Romney has more or less put the blame on President Obama for the country’s miniscule growth out of the recession. A campaign adviser for the Romney camp told Politico that it is politically “unwise” for Romney to give specifics about his economic vision, arguing that Romney’s main goal is “communicating direction to the American people.”
Americans support taxing rich
But during election season, it’s about winning votes, and a new poll conducted by the Pew Center found that 58 percent of Americans feel that the rich should pay more in taxes. And if there was any indication on how heavy the economy weighs on the minds of voters, a Gallup poll shows the 65 percent of Americans believe that economic issues are the most pressing to the country right now.
So it seems Romney’s broad spectrum plan to lower taxes would go against the current ideology of most Americans. Romney’s campaign website lays out the foundation for his tax plans, saying “marginal rates must be brought down to stimulate entrepreneurship, job creation and investment, while still raising the revenue needed to fund a smaller, smarter, simpler government.”
That revenue stream would come from federal program cuts that benefit the poor, such as Pell Grants, Medicaid, food stamps and job training. Washington Post political analyst Chris Cillizza said Romney will try to garner support for his tax plan at the RNC while justifying his stance on reducing federal programs. He said Romney’s “rich guy problem” will have to be addressed for people to believe he can identify with those whose programs he would reduce.
“What Romney and the convention planners will likely do is try to place his wealth in a broader context of his life story: someone who did achieve affluence but rather than luxuriate in it went on to help save the Salt Lake City Olympics, serve as governor of Massachusetts and then pursue the presidency,” Cillizza wrote. “Viewed in that context, Romney will likely try to cast himself who has dedicated the second part of his life to public service for no other reason than he felt called to do so.