Merry Christmas! Mitt Romney, in an interview, today, with The Wall Street Journal expresses his open-mindedness toward a VAT, if the “modeling” proves to be pro-growth, and implemented with a vision of fairness and not class-warfare.
Here is the portion of the interview relating to tax reform:
” What about his reform principles? Mr. Romney talks only in general terms. “Moving to a consumption-based system is something which is very attractive to me philosophically, but I’ve not been able to sufficiently model it out to jump on board a consumption-based tax. A flat tax, a true flat tax is also attractive to me. What I like—I mean, I like the simplification of a flat tax. I also like removing the distortion in our tax code for certain classes of investment. And the advantage of a flat tax is getting rid of some of those distortions.”
Since Mr. Romney mentioned a consumption tax, would he rule out a value-added tax?
He says he doesn’t “like the idea” of layering a VAT onto the current income tax system. But he adds that, philosophically speaking, a VAT might work as a replacement for some part of the tax code, “particularly at the corporate level,” as Paul Ryan proposed several years ago. What he doesn’t do is rule a VAT out.
Amid such generalities, it’s hard not to conclude that the candidate is trying to avoid offering any details that might become a political target. And he all but admits as much. “I happen to also recognize,” he says, “that if you go out with a tax proposal which conforms to your philosophy but it hasn’t been thoroughly analyzed, vetted, put through models and calculated in detail, that you’re gonna get hit by the demagogues in the general election.”
That also seems to explain his refusal to propose cuts in individual tax rates, except for people who make less than $200,000, which not coincidentally is also Mr. Obama’s threshold for defining “the rich.”
“The president will characterize anyone running for office, and me in particular, as just in there to lower taxes for rich people, and that is not my intent,” Mr. Romney says. “My intent is to simplify our tax code and create growth, and so I will also look to see whether the top one-half of 1% or one-thousandth of 1% or top 1% are still paying roughly the same share of the total tax burden that they have today. I’m not looking to lower the share paid for by the top, the top earners like myself.”
But doesn’t that merely concede Mr. Obama’s philosophical argument? “No,” Mr. Romney responds, clipping his sentences. “I’m just saying that I’m not looking to change the deal. I’m not looking to go after high-income individuals like myself. I’m not looking to differentially favor. I’m looking to provide a system which continues to recognize that people of higher income pay a larger portion of the tax burden and I’m not looking, I’m not running for office trying to find a way to lower the tax burden paid for by the very high, very highest income individuals. What I’m solving for is growth.” ”