The Republican presidential nominee is famously short of specifics on most topics, but I’m very interested to know how a President Romney would realize this promise he made four times in the final presidential debate:
- "I know what it takes to create 12 million new jobs and rising take-home pay."
- "I will get America working again and see rising take-home pay again."
- "I want to get back good jobs and rising take-home pay."
- "I want to make sure our take-home pay turns around and starts to grow."
“Take-home pay” is pocketbook talk, invoked by politicians because it’s relevant and palpable to real people. That’s because most people (other than, say, self-described “unemployed” millionaire Mitt Romney) have experienced cashing a Friday paycheck. Most people can tell you exactly how much that paycheck is for. And many people have surely experienced a paycheck that was less than they expected, less than they need to pay their bills, or with more money than expected taken out for taxes.
So, yes — who wouldn’t want rising take-home pay, otherwise known as a paycheck with more money? But the follow-up question is simple: how, as president, would you do it?
Here are some federal policy prescriptions that would directly increase some people’s take-home pay:
- Raise the minimum wage
- Increase the pay of federal workers
- Government-imposed wage controls
- Cut payroll taxes
- Cut income taxes
- Extend/increase the Earned Income Tax Credit
It’s safe to assume Mitt Romney doesn’t support the first three. He’s been mum as to whether he supports an extension of the currently-reduced payroll tax rate; there’s been no talk of an additional cut. Romney wants to reduce income tax rates, but would concurrently eliminate tax deductions and thusly cautions, as he did Ohio last month, “By the way, don’t be expecting a huge cut in taxes [overall].”
And as for the Earned Income Tax Credit, the bipartisan initiative to reduce the federal tax burden on poor and lower-income people and incentivize work – that tax credit is a primary way American workers become part of the 47 percent Romney was caught on tape speaking about with such high regard.
Of course, there are conditions that could lead to increased take-home pay, but the creation of those conditions also starts in policy choices: economic growth (tax and regulatory policies), increased competitiveness (education and immigration policies), unionization (labor policies). The Romney campaign claims its five-point plan – the marquee of which is unspecified tax reform – will spur “economic growth." Perhaps it will. And perhaps it won’t.
Buying a lottery ticket could also make you a millionaire (lottery policy?). Policies are choices. For example, eliminating Social Security, and the payroll taxes that fund it, is a surefire way to raise people’s take-home pay – but you don’t hear presidential candidates promising to enrich everyone by ending the social compact. But voters (and debate moderators) should demand that candidates connect the dots; voters should know what choices the candidates would make before they make theirs on November 6.