So the pundit consensus (as well as the snap polls) say Romney won the debate last night. I don't agree but that's not what decides these things.
President Obama has never been a good debater (For those who have forgotten, Hillary Clinton cleaned his clock in the 2008 primary debates.) And he was not good last night. But I thought Romney was terrible - frantic and wild. Answers filled with word salads.
And in particular, I thought Romney' performance on the tax issue was simply absurd. Below the fold I present you the transcript of the tax portion of the debate:
PRESIDENT OBAMA: So, all of this is possible. Now, in order for us to do it, we do have to close our deficit, and one of the things Iím sure weíll be discussing tonight is, how do we deal with our tax code, and how do we make sure that we are reducing spending in a responsible way, but also how do we have enough revenue to make those investments? And this is where thereís a difference because Governor Romneyís central economic plan calls for a $5 trillion tax cut, on top of the extension of the Bush tax cuts, so thatís another $2 trillion, and $2 trillion in additional military spending that the military hasnít asked for. Thatís $8 trillion. How we pay for that, reduce the deficit and make the investments that we need to make without dumping those costs on the middle-class Americans I think is one of the central questions of this campaign.
MR. ROMNEY: Well, sure. Iíd like to clear up the record and go through it piece by piece. First of all, I donít have a $5 trillion tax cut. I donít have a tax cut of a scale that youíre talking about. My view is that we ought to provide tax relief to people in the middle class. But Iím not going to reduce the share of taxes paid by high- income people. High-income people are doing just fine in this economy. Theyíll do fine whether youíre president or I am.
The people who are having the hard time right now are middle- income Americans. Under the presidentís policies, middle-income Americans have been buried. Theyíre -- theyíre just being crushed. Middle-income Americans have seen their income come down by $4,300. This is a -- this is a tax in and of itself. Iíll call it the economy tax. Itís been crushing. The same time, gasoline prices have doubled under the president, electric rates are up, food prices are up, health care costs have gone up by $2,500 a family.
Middle-income families are being crushed. And so the question is how to get them going again, and Iíve described it. Itís energy and trade, the right kind of training programs, balancing our budget and helping small business. Those are the -- the cornerstones of my plan.
But the president mentioned a couple of other ideas, and Iíll just note: first, education. I agree, education is key, particularly the future of our economy. But our training programs right now, we got 47 of them housed in the federal government, reporting to eight different agencies. Overhead is overwhelming. We got to get those dollars back to the states and go to the workers so they can create their own pathways to getting the training they need for jobs that will really help them.
The second area: taxation. We agree; we ought to bring the tax rates down, and I do, both for corporations and for individuals. But in order for us not to lose revenue, have the government run out of money, I also lower deductions and credits and exemptions so that we keep taking in the same money when you also account for growth.
The third area: energy. Energy is critical, and the president pointed out correctly that production of oil and gas in the U.S. is up. But not due to his policies. In spite of his policies. Mr. President, all of the increase in natural gas and oil has happened on private land, not on government land. On government land, your administration has cut the number of permits and license in half. If Iím president, Iíll double them. And also get the -- the oil from offshore and Alaska. And Iíll bring that pipeline in from Canada.
And by the way, I like coal. Iím going to make sure we continue to burn clean coal. People in the coal industry feel like itís getting crushed by your policies. I want to get America and North America energy independent, so we can create those jobs.
And finally, with regards to that tax cut, look, Iím not looking to cut massive taxes and to reduce the -- the revenues going to the government. My -- my number one principle is thereíll be no tax cut that adds to the deficit.
I want to underline that -- no tax cut that adds to the deficit. But I do want to reduce the burden being paid by middle-income Americans. And I -- and to do that that also means that I cannot reduce the burden paid by high-income Americans. So any -- any language to the contrary is simply not accurate.
PRESIDENT OBAMA: Well, I think -- letís talk about taxes because I think itís instructive. Now, four years ago when I stood on this stage I said that I would cut taxes for middle-class families. And thatís exactly what I did. We cut taxes for middle-class families by about $3,600. And the reason is because I believe we do best when the middle class is doing well.
And by giving them those tax cuts, they had a little more money in their pocket and so maybe they can buy a new car. They are certainly in a better position to weather the extraordinary recession that we went through. They can buy a computer for their kid whoís going off to college, which means theyíre spending more money, businesses have more customers, businesses make more profits and then hire more workers.
Now, Governor Romneyís proposal that he has been promoting for 18 months calls for a $5 trillion tax cut on top of $2 trillion of additional spending for our military. And he is saying that he is going to pay for it by closing loopholes and deductions. The problem is that heís been asked a -- over a hundred times how you would close those deductions and loopholes and he hasnít been able to identify them.
[...] When you add up all the loopholes and deductions that upper income individuals can -- are currently taking advantage of -- if you take those all away -- you donít come close to paying for $5 trillion in tax cuts and $2 trillion in additional military spending. And thatís why independent studies looking at this said the only way to meet Governor Romneyís pledge of not reducing the deficit -- or -- or -- or not adding to the deficit, is by burdening middle-class families.
The average middle-class family with children would pay about $2,000 more. Now, thatís not my analysis; thatís the analysis of economists who have looked at this. And -- and that kind of top -- top-down economics, where folks at the top are doing well so the average person making 3 million bucks is getting a $250,000 tax break while middle- class families are burdened further, thatís not what I believe is a recipe for economic growth.
MR. LEHRER: All right. What is the difference?
MR. ROMNEY: -- virtually every -- virtually everything he just said about my tax plan is inaccurate. [...] So -- so if -- if the tax plan he described were a tax plan I was asked to support, Iíd say absolutely not. Iím not looking for a $5 trillion tax cut. What Iíve said is I wonít put in place a tax cut that adds to the deficit. Thatís part one. So thereís no economist can say Mitt Romneyís tax plan adds 5 trillion (dollars) if I say I will not add to the deficit with my tax plan.
Number two, I will not reduce the share paid by high-income individuals. I -- I know that you and your running mate keep saying that, and I know itís a popular things to say with a lot of people, but itís just not the case. Look, I got five boys. Iím used to people saying something thatís not always true, but just keep on repeating it and ultimately hoping Iíll believe it -- (scattered laughter) -- but that -- that is not the case, all right? I will not reduce the taxes paid by high-income Americans.
And number three, I will not, under any circumstances, raise taxes on middle-income families. I will lower taxes on middle-income families. Now, you cite a study. There are six other studies that looked at the study you describe and say itís completely wrong. I saw a study that came out today that said youíre going to raise taxes by 3(,000 dollars) to $4,000 on -- on middle-income families. There are all these studies out there.
But letís get to the bottom line. That is, I want to bring down rates. I want to bring down the rates down, at the same time lower deductions and exemptions and credits and so forth so we keep getting the revenue we need.
And you think, well, then why lower the rates? And the reason is because small business pays that individual rate. Fifty-four percent of Americaís workers work in businesses that are taxed not at the corporate tax rate but at the individual tax rate. And if we lower that rate, they will be able to hire more people.
For me, this is about jobs. [...] This is about getting jobs for the American people.MR. LEHRER: Yeah. Do you challenge what the governor just said about his own plan?
PRESIDENT OBAMA: Well, for 18 months heís been running on this tax plan. And now, five weeks before the election, heís saying that his big, bold idea is ďnever mind.Ē And the fact is that if you are lowering the rates the way you describe, Governor, then it is not possible to come up with enough deductions and loopholes that only affect high-income individuals to avoid either raising the deficit or burdening the middle class. Itís -- itís math. Itís arithmetic.
Now, Governor Romney and I do share a deep interest in encouraging small-business growth. So at the same time that my tax plan has already lowered taxes for 98 percent of families, I also lowered taxes for small businesses 18 times. And what I want to do is continue the tax rates -- the tax cuts that we put into place for small businesses and families.
But I have said that for incomes over $250,000 a year that we should go back to the rates that we had when Bill Clinton was president, when we created 23 million new jobs, went from deficit to surplus and created a whole lot of millionaires to boot.
And the reason this is important is because by doing that, we can not only reduce the deficit, we can not only encourage job growth through small businesses, but weíre also able to make the investments that are necessary in education or in energy.
And we do have a difference, though, when it comes to definitions of small business. Now, under -- under my plan, 97 percent of small businesses would not see their income taxes go up. Governor Romney says, well, those top 3 percent, theyíre the job creators. Theyíd be burdened.
But under Governor Romneyís definition, there are a whole bunch of millionaires and billionaires who are small businesses. Donald Trump is a small business. And I know Donald Trump doesnít like to think of himself as small anything, but -- but thatís how you define small businesses if youíre getting business income. And that kind of approach, I believe, will not grow our economy because the only way to pay for it without either burdening the middle class or blowing up our deficit is to make drastic cuts in things like education, making sure that we are continuing to invest in basic science and research, all the things that are helping America grow. And I think that would be a mistake.
MR. ROMNEY: Jim, let me just come back on that -- on that point. [...] These small businesses weíre talking about [...] -- Well, President, youíre -- Mr. President, youíre absolutely right, which is that with regards to 97 percent of the businesses are not -- not taxed at the 35 percent tax rate, theyíre taxed at a lower rate. But those businesses that are in the last 3 percent of businesses happen to employ half -- half -- of all of the people who work in small business. Those are the businesses that employ one quarter of all the workers in America. And your plan is take their tax rate from 35 percent to 40 percent.
Now, I talked to a guy who has a very small business. Heís in the electronics business in -- in St. Louis. He has four employees. He said he and his son calculated how much they pay in taxes. Federal income tax, federal payroll tax, state income tax, state sales tax, state property tax, gasoline tax -- it added up to well over 50 percent of what they earned. And your plan is to take the tax rate on successful small businesses from 35 percent to 40 percent. The National Federation of Independent Businesses has said that will cost 700,000 jobs. I donít want to cost jobs. My priority is jobs. And so what I do is I bring down the tax rates, lower deductions and exemptions -- the same idea behind Bowles-Simpson, by the way. Get the rates down, lower deductions and exemptions to create more jobs, because thereís nothing better for getting us to a balanced budget than having more people working, earning more money, paying -- (chuckles) -- more taxes. Thatís by far the most effective and efficient way to get this budget balanced.
PRESIDENT OBAMA: Jim, I -- you may want to move on to another topic, but I would just say this to the American people. If you believe that we can cut taxes by $5 trillion and add $2 trillion in additional spending that the military is not asking for -- $7 trillion, just to give you a sense, over 10 years thatís more than our entire defense budget -- and you think that by closing loopholes and deductions for the well-to-do, somehow you will not end up picking up the tab, then Governor Romneyís plan may work for you.
But I think math, common sense and our history shows us thatís not a recipe for job growth. Look, weíve tried this -- weíve tried both approaches. The approach that Governor Romneyís talking about is the same sales pitch that was made in 2001 and 2003. And we ended up with the slowest job growth in 50 years. We ended up moving from surplus to deficits. And it all culminated in the worst financial crisis since the Great Depression.
Bill Clinton tried the approach that Iím talking about. We created 23 million new jobs. We went from deficit to surplus, and businesses did very well.
So in some ways, weíve got some data on which approach is more likely to create jobs and opportunity for Americans, and I believe that the economy works best when middle-class families are getting tax breaks so that theyíve got some money in their pockets and those of us who have done extraordinarily well because of this magnificent country that we live in, that we can afford to do a little bit more to make sure weíre not blowing up the deficit.
MR. ROMNEY: Jim, the president began this segment, so I think I get the last word, so Iím going to take it. All right? (Chuckles.)
MR. LEHRER: Well, youíre going to get the first word in the next segment.
MR. ROMNEY: Well, but -- but he gets the first word of that segment. I get the last word of that segment, I hope. Let me just make this comment. [...] First of all -- [...] Let me -- let me repeat -- let me repeat what I said -- (inaudible). Iím not in favor of a $5 trillion tax cut. Thatís not my plan. My plan is not to put in place any tax cut that will add to the deficit. Thatís point one. So you may keep referring to it as a $5 trillion tax cut, but thatís not my plan.
[...] Number two, letís look at history. My plan is not like anything thatís been tried before. My plan is to bring down rates but also bring down deductions and exemptions and credits at the same time so the revenue stays in, but that we bring down rates to get more people working. My priority is putting people back to work in America. Theyíre suffering in this country. And we talk about evidence -- look at the evidence of the last four years. Itís absolutely extraordinary. Weíve got 23 million people out of work or stop looking for work in this country.
MR. ROMNEY: Itís just -- itís -- weíve got -- we got -- when the president took office, 32 million people on food stamps; 47 million on food stamps today. Economic growth this year slower than last year, and last year slower than the year before. Going forward with the status quo is not going to cut it for the American people who are struggling today.
Romney's answers are complete gibberish and nonsense. Was the President as effective as he could have been? No. But Romney certainly did not "win" this segment.
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