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· September 19, 2012

Grand Old History: GOP Used to Support a Hand Up

What we thought we were going to get this week from Republican presidential candidate Mitt Romney was more detail about how he would move the country forward and create the booming economy he’s been promising on the trail. Instead, he’s divided the country down the middle between so-called “makers” and “takers” and turned his back on compassionate conservatism. Let’s not belabor the secret video in which Mitt Romney speaks with smug self-assurance and disdain about the 47%, but let’s not let it slide either. When you consider the facts that he was in an investment banker’s Boca Raton home, members of the audience had each ponied up $50,000 to be there, Romney believed he had a private moment and his tone and message, one may be left with the impression we finally got to see the real Romney. The Tax Policy Center, Ezra Klein, the Economix Blog – actually every credible policy source – have exposed the intellectual dishonesty displayed by Romney and others who use the number of Americans who pay no federal income tax out of context and as a wedge to divide us. What’s astonishing is that the GOP has moved so far to the right, the party (and standard bearer Romney) is abandoning decades of its own policy toward taxes and the working poor. Romney is accelerating the Republican Party’s shift away from ‘compassionate conservatism,’ the very concept that helps them appeal to the middle. The New York Times had an interesting story today that illustrates this. As the Times adds to the body of work out there taking down Romney’s comments about the 47%, the paper provides a bit of history we should all note:
For a long time, cutting taxes for the poor was a major emphasis of the Republican Party. One reason that many poor people no longer pay federal income taxes is that they qualify for credits such as the earned-income tax credit, which has its roots in conservative thinking and has long been supported by members of both parties as a way to help the poor without increasing welfare payments or raising the minimum wage. The credit was added to the tax code when Gerald Ford was president, and was expanded by Republicans and Democrats, including President Ronald Reagan, who called it “one of the best anti-poverty programs this country has ever seen” in 1986. President George W. Bush, for his part, doubled the child tax credit, and his tax cuts erased the federal income tax liability for millions of households.
What we know about the numbers is that nearly a third of those who owe no federal income tax get to that state of affairs because they benefit from deductions like the earned income tax credit (EITC), child care tax credits and standard deductions for children. The EITC was created by Republicans. The child tax credit was doubled by the GOP. These policies were/are the proverbial “hand up” conservatives chat about at cocktail parties and on TV. What’s more, in a nation with a tax code that is a monstrosity of complexity built to benefit corporate interests and the wealthy, deductions like the EITC and the child care credit are small beer compared to corporate loopholes and carried interest. They are also good policy. They keep people working and for many they are a path to upward mobility. It’s not just that Romney says his job isn’t to be concerned with the likes of the working poor. He and Paul Ryan also have plans to scale back the EITC in order to help pay for their budget and tax plan that cuts taxes on the wealthy and would lead to tax increases for the middle class. We outlined in our recent report how it would work in Ohio. President Barack Obama’s Recovery Act contained enhancements to the EITC and the child tax credit. In Ohio, there are 1.6 million families that qualify for the EITC and the expanded refundable portion of the child tax credit. Under Romney-Ryan, we estimate that 500,000 of those families would see their taxes go up $876 per year due to the Republican candidates’ plan to rollback Obama’s improvements. Romney also proposes to cut by 58% the child care tax credit that allows many working families to afford to keep working. 158,000 families in Ohio alone use this credit. With the Romney cut, they would pay $318 more per year per child. Romney’s pronouncements on the relative worth of half of the U.S. aren’t just the talk of a guy who’s never been in touch, they are another sign of the hard right shift of his party. And, if you’ve been thinking that Romney is just pandering to keep his right-wing base in line – read our latest report. He intends to walk the walk.

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