Mitt Romney's tax plan appears to have been designed by folks lacking a calculator. As we talked about a couple of weeks ago, the Republican wants voters to believe he can slash taxes on the wealthy, increase defense spending, increase entitlement spending, and balance the budget, all at the same time.
Romney will pay for this, he claims, by closing loopholes and eliminating deductions. Which ones? That's a secret, though he's said the home-mortgage-interest deduction, the health care deduction, and the charitable-contribution deduction are all off the table, which only makes the idea more absurd.
The policy, if attempted, would eventually reach a fork in the road: either Romney would have to raise middle-class taxes to pay for the tax cuts, or he'd have scale back the size and cost of the tax cuts. It's either one or the other; there's just no way around this.
This week, Romney economic advisor Kevin Hassett said, if push came to shove and the figures "don't add up," the tax plan "would have a different change in rates" -- in other words, a Romney administration would have no choice but to scale back its tax-cutting ambitions.
But before you say, "Well, that seems quite responsible of them," the Romney campaign told TPM overnight that Hassett has it wrong and that all of the contradictory goals "are achievable."
Matt Yglesias summarized the problem nicely.
Basically they're saying that 2+2=5. It is simply not possible to cut tax rates across the board, eliminate deductions to maintain revenue neutrality, and leave the distributive structure of the tax code unchanged. Call it "Romney's Trilemma." ... A big 20 percent across the board cut isn't going to work.
This is basically a test to see whether voters still care about arithmetic at all.