Less Than Nothing

Republican presidential candidate Mitt Romney unveiled an economic recovery plan yesterday. I know what you're thinking...Mitt who? But believe me, he's trying to become the next POTUS, and there are some people who aren't Rick Perry who think he might just seize the nomination.

Mitt has experience in business and would become perhaps our first CEO-style president since, well, since George W. Bush, were he to win. Moreover, he's using his business experience to argue that he can fix the economy:

Mitt Romney unveiled his plan to rejuvenate the American economy here Tuesday, offering a detailed outline that includes repealing President Obama’s health care law, cutting the corporate tax rate, placing sanctions on China as a currency manipulator and immediately reducing taxes on savings and investment by the middle class — and promised to push many of these policies on his first day in the Oval Office.

With his business background, Mr. Romney has portrayed himself as the presidential candidate best prepared to steer the nation at this time of economic distress, and his economic plan is a classic Republican blueprint that relies on tax cuts and reduced regulation — not stimulus — to jump-start the economy.

OK, well, the economy sucks, so I'm willing to listen:

Standing in front of a large banner that read “Day One, Job One,” Mr. Romney detailed the 10 actions he would take the first day of his presidency. Five are executive orders, and the other five are pieces of legislation, including the tax changes, he would send to Congress and request action on within 30 days.

“The right course for America is to believe in growth,” Mr. Romney, a former Massachusetts governor, said at the McCandless International Trucks dealership here. “Growing our economy is the way to get people to work and to balance our national budget.”

In the plan, whose stated goal is to “restore America to the path of robust economic growth necessary to create jobs,” he promised to immediately cut the corporate income tax rate, currently topping out at 35 percent, to 25 percent. Although he did not outline any specific proposals for closing loopholes or otherwise simplifying the tax code, he also promised to make permanent the tax cuts on individuals enacted under President George W. Bush and to eliminate taxes on dividends, interest and capital gains for anyone making less than $200,000 a year.

Yup, that sounds like CEO-style thinking to me...the same kind of "cut taxes on the powerful, never mind the details, just let them run wild, and we'll all be just fine" type of thinking that led to the economic crises that ended GWB's term in office. But more specifically, every person in America who is not a corporation (and as Mitt will tell you, that's not as many people as you would imagine) will have the same income tax rate they now have, but the corporations will pay even less.

The problem with corporations paying even less, though, is that currently a shockingly large number of them are paying nothing at all. Corporations like the behemoth General Electric:

General Electric, the nation’s largest corporation, had a very good year in 2010.

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

OK, so let's do the math. If the current corporate tax rate is 35% and in that climate GE was able to claim a tax benefit of $3.2 billion, how much more will the average US tax payer need to cough up to keep GE rolling in record profits under Romney's proposed 25% tax rate?

But wait...don't answer just yet, because Mitt's just pulling your leg here. He knows that although the official corporate tax rate is 35%, most corporations with means have entire departments dedicated to finding loopholes that already enable them to pay much, much less than that:

Of the 500 big companies in the well-known Standard & Poor’s stock index, 115 paid a total corporate tax rate — both federal and otherwise — of less than 20 percent over the last five years, according to an analysis of company reports done for The New York Times by Capital IQ, a research firm. Thirty-nine of those companies paid a rate less than 10 percent.

So in order to calculate how much more your average American is going to have tighten their belts to keep profit record-breaking corporations from paying any taxes at all, you will have to figure in all the loopholes they're already taking advantage of that Romney shows no interest in closing.

Let's see: -$3.2 billion paid under the 35% rate - an additional 10% + whatever new loopholes they'll buy under a Romney administration = at least $320 million (unless I have no idea how to do this, which is entirely feasible) ...or, in other words, $1 from every man, woman and child in the country. Mind you, that's probably the $1 most Americans were counting on saving or investing so that they too could benefit from Romney's plans, but...