Romney: 47th Place in Jobs
“Romney went further than any other governor in trying to wring money out of corporations. Romney’s tax policies were not helpful for many small businesses. When Romney took many IRS subchapter ‘S’ businesses in Massachusetts and almost doubled their tax rates, it was an important disincentive to investment, growth and job creation.” - Peter Nicholas, founder of Boston Science Corporation CEO
Romney: 47 outta 50 – Fiscal Fail
In Massachusetts, Romney passed a host of new tax and fee increases, hitting the corporate world hard and devastating job creation. Mitt Romney has represented himself as a tax cutter. But HE IS NOT. He is a ‘fee’ increaser. A liberal Republican who governs like a progressive and disguises himself as a palatable conservative. The power to tax is the power to destroy. High tax rates destroy the incentive to invest and work and destroy economic growth and job creation.
When we think of government revenues, we tend to immediately think of taxes. But government also levies many ‘surcharges’, ‘tolls’, ‘fines’ and ‘fees’. Politicians tend to regard fees as more palatable to voter ears than taxes and all lawmakers play political semantics between “tax” and “fee”. If it walks like a duck… Fee’s, taxes; call it anything you want …it is built-in inflation. Fees are a stealth tax. Revenues are a tax.
Romney increased over a hundred ‘state fees’ as Massachusetts Governor on residents by $432 million annually. These fee hikes were all proposed by Romney; they were not items originated by the Legislature. And, he increased various taxes on businesses by $309 million annually, via three “corporate loopholes” closing packages, one each in 2003, 2004 and 2005. In all, Romney raised state government fees and taxes by $750 million dollars a year.
Each of the four years Romney served as governor, he raised taxes – while pretending he didn’t. He claims he only raised mandatory government “fees.” But government mandatory fees are nothing but taxes, and taxes are nothing but mandatory government fees. His “fees” had nothing to do with services and everything to do with the purpose of taxes: raising revenue. Duplicate licenses, are not “services” that government provides; they are simply licenses needed to comply with government-established mandates.
As a presidential candidate, Romney says he opposes revenue-boosting tax increases. But back when he was Massachusetts’ governor, he bragged about them. The Romney administration in 2004 and 2005 quietly highlighted the state’s tax and fee hikes in a presentation as part of an effort to persuade the financial rating agencies Standard & Poor’s and Fitch Ratings to improve the state’s bond ratings.
As reported by the Wall Street Journal and Politico, and made public through freedom of information requests, the Romney administration’s bullet-point presentations to the agencies touts the strength of the state’s budget, thanks in part, to a 2002 tax increase that he opposed. The documents, 27 pages of confidential “discussion materials” [Part 1, 2, 3, 4] and a 50-page presentation focused on the 2005 budget and highlights ‘higher fees’ and newly ‘closed loopholes’ that Romney championed himself. In March 2005, Standard & Poor’s eventually upgraded Massachusetts to AA from AA-.
These ‘revenue enhancements’ of “tax loopholes” would add “$269 million in additional recurring revenue” to state coffers, the presentation noted, along with $271 million in ‘increased fees’. But on the campaign trail this summer , Romney blasted Obama’s call for similar revenue boosters to help reduce the nation’s debt. Seems Romney forgot this himself as he tried to manage his states own budget deficit. Romney’s case to S&P is a far cry from the anti-tax absolutism he decries on the stump as his own history on tax policy is riddled with inconsistencies.
“It’s straightforward,” the Massachusetts Taxpayers Foundation told McClatchy Newspapers in 2007. “He raised corporate taxes.” And, according to the Associated Industries of Massachusetts, the state’s largest business lobbyist group, “These certainly were tax increases and indicating he balanced a budget without raising taxes is misleading at best,” adding, “we respectfully disagree.” Romney erred in pursuing tax increases to pay off the states budget deficit and ‘rainy day fund’ instead of pursuing robust economic expansion policies.
Politicians revenue-raising measures often use ‘closing tax loopholes’ as a reason to increase corporate taxes by changes in tax policy. In Romney’s case, according to the business-backed Massachusetts Taxpayers Foundation, ‘some were real loopholes but by and large they were increases in corporate taxes.’ Such disputes between business and government are relatively common in fiscal policy. Harder to square with Romney’s public rhetoric, is the presentation’s blunt claim of credit for the deeply contested 2002 tax increase.
Puzzling that Romney raised taxes on business by a total of $309 million. But, he then tried to raise taxes on hotels, but was stopped by the Democrat legislature. He nickeled and dimed increased fees on marriage licenses, gun registrations, gasoline deliveries, property-deed certificates, and at the time also joined a coalition lobbying congress to tax Internet activity. Romney increased taxes the moment he signed RomneyCare too. Half of RomneyCare’s new spending was financed by the federal government, or more aptly put, you, the taxpayer. Click here to watch the Cato Institute discuss the parallels of RomneyCare and Obamacare.
Romney’s tenure was clearly not a triumph for small-government activism. But it was a triumph for sex offenders. Romney decided not to raise fees for convicted sex offenders; vetoing a $75 fee required by law to register with the state. When campaigning for Governor, Mitt refused to sign a “no new taxes” pledge, calling it “government by gimmickry.” His signature wasn’t necessary, he claimed. Remember this when you hear Romney proclaim: “I have vetoed many bills as Governor.” …or “I didn’t raise taxes.”
Any fee assessment that raises money in excess of what is needed to defray costs is a tax. In another of his “hit and runs,” he even supported a tax on out-of-state commuters. According to Massachusetts Dept. of Revenue figures, the total amount New Hampshire taxpayers surrendered to Massachusetts grew from $213.6 million in 2002 to $248.9 million in 2006, a 16.5% increase. When the bill came to his desk, he signed it, and didn’t veto it. Mitt Romney has been a champion of new taxes.
Source: New Hampshire Union-Leader
All this lead to the Club For Growth ultimately giving Romney a “C” on fiscal issues after concluding that he “broke his verbal commitment” to not raise taxes in Massachusetts. And, the non-partisan and highly respected FactCheck.org says Romney “increased fees and shifted some of the tax burden back to the local level.” Moderates and liberals are adept at revenue-raising sleight-of-hand; when another tax increase would raise voter ire, they simply deem it a toll, fine, fee or a “surcharge.” The independent Massachusetts Taxpayers Foundation puts the revenue total of fee hikes and tax loophole-closings at between $740 and $750 million a year.
Romney trumpets his business experience and sites this record of taking Massachusetts from a $3 billion dollar deficit to a one billion dollar surplus. But the cost of his balanced budgets and his tax policies were devastating for small business… taking aim at mugging IRS subchapter ‘S’ businesses and almost doubling their tax rates. Small Businesses combined employ more people than Fortune 500 companies and are the backbone for job creation and economic growth.
Romney claims to have cut the Massachusetts budget by “$2 billion.” Sometimes he claims he cut it “$3 billion.” The deficit was actually $1.3 billion according to Factcheck.org and he balanced the budget mostly with tax and ‘fee increases’, and his marginal spending cuts predominantly came through government consolidation and duplicative waste. Any spending reductions Romney touts occurred in just one year, 2003. Other years, spending rose every year, often far faster than the rate of inflation. In 2006, he restored several prior spending cuts.
Romney’s spending record started off decent, but like most politicians, it degraded over time. During his first two years in office, the general fund budget grew at a pace of 0.1% and 4.1%, respectively. The next two years, however, spending skyrocketed. In FY 2006, spending jumped 7.6%, and in FY 2007, it grew a whopping 13%, hardly indicative of “fiscal conservatism.” Of Romney’s assertion about the 2005 budget surplus, ‘There never was a $1 billion surplus,’ countered the Massachusetts Taxpayers Foundation. And, Governor Deval Patrick agreed.
Romney’s unforgiving fiscal record is as flawed as Obama’s. By the end of his four years in office, Massachusetts had squeezed out a net gain in payroll jobs of just 0.9%, compared with job growth of 5.3% for the nation as a whole. At Romney’s swearing in, the MA unemployment rate was 5.6%. When he left office it was 4.7%. The states unemployment rate was influenced by a steady out-migration of working-age adults during the Romney years. From start to end, 222,000 wage earners or the equivalent of 3.5% of the state’s population fled the state while the rest of New England created nearly 200,000 jobs. Between 2002 and 2006, the number of employed residents declined by 8,500.
By comparative purposes, over the same period, job growth in Texas was 6.9%, in Utah it was 9% and in Minnesota it was 3.5%. But Massachusetts was only one of two states to have no growth in its resident labor force between 2002 and 2006. However, it’s worth noting, there was an increase of over 3,000 public employees on the state government payroll. Overall, there were roughly 430,600 government workers in Massachusetts when Romney’s term ended; an increase of 7.2% from when he began.
Romney represents himself as a tax cutter and a job creator, but the record states otherwise. When you look at his past record, and his only service in public office, you learn Romney governed as a big-government liberal, who favored revenue-raising measures; taxes and fees. His past contains a mixture of limited accomplishments and some very troublesome side effects that beg to be explained. Details on Romney’s governing performance:
- Under Mitt Romney, from 2003 to 2007, Massachusetts ranked 47th among all 50 states in job creation. Net result: 50th out of 50 after first year, 47th after four years.
- As governor of Massachusetts, Romney raised state government fees and taxes by three quarters of a billion dollars a year. During his four year tenure, Romney nickeled and dimed Massachusetts families and individuals with over a hundred fee increases. Cato found that Romney increased annual state fees by $500 million as governor and proposed two corporate tax increases totaling close to $400 million a year
- The local tax burden increased from 10% to 10.6% of per capita income during Romney’s governorship, according to analysis by the Tax Foundation [Boston Globe, 6/29/07].
- In real dollars, the per capita tax burden increased $1175.71 during Romney’s term.
- Under Romney’s stewardship, Massachusetts manufacturing jobs declined by more than 14% – double the national rate (Boston Globe, 7/28/07) and the third worst record in the country. Nationally, manufacturing dropped only 7%.
- By the end of his fourth year in office, Massachusetts jobs growth was an ‘anemic’ 0.9%, compared with job growth of 5.3% for the nation as a whole during the same period. This, after four years. That puts Romney and Obama on a level playing field.
- Out of the 25 freshmen Republican Governors rated by the Cato Institute on fiscal issues, Romney had the 2nd worst score.
- Massachusetts ranked third lowest in job creation and would have ranked second lowest if Hurricane Katrina had not devastated the Louisiana economy
- The Boston Globe highlights Massachusetts economic performance during Romney’s tenure in this chart
- On his watch, state spending grew from $22.3 billion to $28.1 billion, an annual budget increase of 6.5% during his tenure. Overall spending during Romney’s tenure increased 20.7%
- On all key labor market measures, Massachusetts not only lagged behind the country as a whole, but also ranked at or near the bottom of the state distribution during Romney’s term
No matter how you slice the data, under Romney, job creation and economic growth were devastating. Romney passed a host of new tax and fee increases, hitting the corporate world and mugging small businesses. Over four years, he squeezed out a net gain in payroll jobs under 1% for the private sector. His overall spending increased 20.7%, while expanding government bureaucracy and growing the number of state employees in government jobs 7.2%.
Right before the 2002 election, Romney ran millions of dollars in ads portraying himself as a “no new taxes” governor and a ‘jobs creator.’ But his history is marked by statements at odds with his gubernatorial record and his campaign rhetoric. Candidate Romney tells us one thing. His record proves another. Ignore candidate Romney’s words. Look at elected Governor Romney’s deeds. Romney has been rewriting his past. Mitt Romney is no fiscal conservative.
Business experience does not guarantee a person will govern as a conservative. And, the evidence is overwhelming that Romney’s business experience did not help him govern as a conservative. There have been many liberal presidents with business experience; one that comes readily to mind is Jimmy Carter. And, the RINO population is full of America’s leading businessmen supporting the candidacy and policies of Barack Obama.
The real Mitt Romney is clearly an extraordinarily ambitious man with no perceivable political principle whatsoever. He will alter his past, exaggerates his record and traffic in ambiguous language. That puts Romney and Obama in the same sand box. Romney is a manufactured candidate blinded by political ambition. He moderates his stripes, but he doesn’t change them.
Romney doesn’t apply principle, he manages image; his own image, like Obama. Romney falsely implies he is the man of the hour. He also overstates his accomplishment and understates the side effects. In his zeal to capture conservative hearts, on the stump, Romney will sound like the house that Reagan built, but will then move-in and govern under a Rockefeller tent.
Nobody can choreograph political theater and distortions of failed policies like Romney and Obama. They are similar in this regard. Romney speaks in grand-sounding platitudes that are music to conservatives’ ears, and only hopes you don’t check the details. Platitudes are like that — the devil is in the details, and Romney’s “details” always entail more, bigger government, mandates, and meddling, the opposite of what his platitudes promise.
There’s just one requisite for being a conservative political leader, and that is that you actually are one. Romney is telling you what you want to hear, not who he is. Dishonesty runs inherent in his claims. Making sneaky distinctions allows clever pivots. Mitt Romney has a truth problem. Mitt Romney has a problem with authenticity. Mitt Romney has an identity problem.
With job creation and the poor economy at the forefront in the next election, can we afford to be wrong? Can we afford another politician who disguises and alters his intent? For as much progress as the Tea Party and the conservative movement has made, is Obama lucky enough to have Republicans nominate a candidate whose weakest issue is Romneycare, taxes, and jobs? …[sounds of crickets]
For the full story on Mitt Romney, read: “An Essay on Mitt Romney.”
Mitt Romney: “I’m not running as the Republican view or a continuation of Republican values. That’s not what brings me to the race. [Romney video at the 1:15 mark]