A top adviser to Mitt Romney’s presidential campaign denied the nation’s income inequality gap in a Wall Street Journal editorial on Thursday, brushing off the growing concentration of wealth in the hands of the very wealthy by arguing that lower-income Americans are buying more consumer goods.

“Today we hear that the gains from economic growth accrue to the highest-income earners while the standard of living of the poor and middle America stagnates and the gap between the richest and the poorest grows ever wider,” Kevin Hassett and Aparna Mathur argue. “That portrait of the country is wrong“:

Yet the access of low-income Americans—those earning less than $20,000 in real 2009 dollars—to devices that are part of the “good life” has increased. The percentage of low-income households with a computer rose to 47.7% from 19.8% in 2001. The percentage of low-income homes with six or more rooms (excluding bathrooms) rose to 30% from 21.9% over the same period.

Appliances? The percentage of low-income homes with air-conditioning equipment rose to 83.5% from 65.8%, with dishwashers to 30.8% from 17.6%, with a washing machine to 62.4% from 57.2%, and with a clothes dryer to 56.5% from 44.9%.

The percentage of low-income households with microwave ovens grew to 92.4% from 74.9% between 2001 and 2009. Fully 75.5% of low-income Americans now have a cell phone, and over a quarter of those have access to the Internet through their phones.

But this argument, a favorite of conservative think tanks like the Heritage Foundation, is highly misleading. Appliances and commonly used consumer gadgets like cell phones are necessities in the 21st century and are significantly cheaper today than they were just decades earlier. In fact, were families to sell their appliances in order to help pay for food and other basic necessities, many would still struggle — for while prices on microwaves and air conditioners have fallen, “the real everyday basics such as quality child care and out-of-pocket medical costs” are “squeezing the budgets of the poor and middle-class alike.”

Hassett argues that safety net programs like “unemployment insurance, food stamps, Medicaid” help families afford basic needs, further shrinking the nation’s income gap. But these programs are already failing to keep up with need and Romney and Ryan have proposed massive cuts to the safety net in order to pay down the deficit and finance a tax cut plan that is heavily skewed towards the rich.

Their approach would only exacerbate the differences between the rich and poor — a gap that has grown dramatically since the late 1970s. Indeed, compared to the 30 countries in the Organization for Economic Co-operation and Development (OECD), the United States has a Gini coefficient — a number that measures the distribution of income on a scale of 0 (perfectly unequal) to 1 (perfectly equal) — of 0.47 and ranks near the very bottom in inequality. America also suffers from the absolute highest “percentage of national income that went to the top 1 percent” and “has seen income inequality increase at a much faster rate than most other countries.”

This trend is already devastating the American democratic ideals of equal opportunity and upward mobility. Unfortunately, neither Romney nor his advisers can see the problem or offer the kind of tax and economic policies that will help solve it.

The list of corporate CEOs and owners who have tried scaring their employees into voting for Mitt Romney got a bit longer this week thanks to Milwaukee businessman Mike White.

White, the owner of the industrial equipment firm Rite-Hite, sent his 1,400 employees an email this week warning them that they needed to “understand the personal consequences to them of having our tax rates increase dramatically if President Obama is re-elected,” according to the Milwaukee Journal-Sentinel, which was sent a copy of the correspondence. The email goes on to warn that Rite-Hite would consider dropping its contribution to the workers’ retirement plan, blaming tax hikes that White says are on the way if Obama wins a second term, and that workers will lose their health care:

“The tax rate we pay is not 17%, as Warren Buffett would have you believe; with state taxes it is roughly 45%. President Obama has announced that our planned tax rate would increase to roughly 65%, reducing our after tax income by 36% and dramatically reducing, if not eliminating, your and my RSP contributions.”

As a result, White said the company’s profits would not be reinvested. Instead, he wrote, “the money will be sent into the abyss that is Washington, D.C. So, on top of the burden of having your personal taxes increase dramatically, which they will, your RSP contributions and healthy retirement are also at risk, all for the sake of maintaining an over-sized government that borrows 42% of every dollar it spends.”

White also wrote that Obama’s re-election means there is a “good chance of losing Rite-Hite insurance and being put into Obamacare.”

White is no stranger to Republican politics. He was the single largest individual donor to Gov. Scott Walker’s (R-WI) 2010 election, and in fact was named in a lawsuit for exceeding the state’s $10,000 cap on campaign contributions.

In the last few weeks, several CEOs — themselves all multi-millionaires — warned employees that if Obama wins the election in two weeks, their jobs could hang in the balance. Rite-Hite employees were taken aback by the message, telling the Journal Sentinel they felt threatened by the email.

It’s unclear whether White’s email was in response to Mitt Romney’s plea for business owners to pressure their employees to vote for him. In a June conference call, Romney told CEOs, “I hope you make it very clear to your employees what you believe is in the best interest of your enterprise.”

Eleven states will give voters an opportunity to change state tax policy on election day this year. However, most of these initiatives — according to Citizens for Tax Justice — “would make state taxes less fair or less adequate (or both).”

But some ideas are worse than others. Here are the three worst ideas voters will decide on:

So-called “Taxpayer Bill of Rights” (TABOR): Florida voters will decide whether to accept Amendment 3, which limits public spending and revenue collection through a proscribed and — according to the Center on Budget and Policy Priorities (CBPP) — flawed formula. It also requires a supermajority of the legislature to override the revenue limit. TABOR virtually guarantees revenue shortages and makes it extremely difficult to raise more, so Amendment 3 will likely lead to drastic cuts in public spending. As the CBPP shows, if all the spending cuts were enacted at once, revenue losses would exceed $11 billion in ten years.

Colorado is the only state to have enacted TABOR, but after 13 years of harmful budget cuts, Colorado voters suspended it in 2005.

Supermajority requirements for changing tax policy: Both Michigan and Washington are debating requiring a two-thirds legislative supermajority in order to end tax breaks or increase tax rates. Such a requirement virtually guarantees legislative gridlock and a host of other problems.
In 2010, Washington put in place a supermajority requirement for revenue changes, known as I-1053, but it was struck down as unconstitutional in May 2012.

Again, history provides a useful lesson. California passed a supermajority requirement in 1978, Prop 13, which Time called “the root of California’s misery.” Among the many problems Prop 13 caused, it resulted in legislative dysfunction and multi-billion dollar drops in spending and revenue. By design, revenue plunged 60 percent the first year after the law’s passage, and education funding dropped.

Since the legislature is virtualy unable to raise taxes, proposals to increase taxes come through popular referendum.

Repealing the estate tax: Oregon voters will decide on Measure 84, which gradually repeals the estate tax and will cause a $120 million loss in revenue for the state every year. Though other parts of the law are unclear, it could potentially “open a new egregious loophole allowing individuals to avoid capital gains taxes on the sale of land and stock by simply selling property to family members.” If this analysis is accurate, Oregon would lose up to $175 million by 2021.

There is no evidence to suggest repealing the estate tax increases the number of wealthy tax payers who live in a state, a constant claim of proponents. In the end, repealing the estate tax would be an extremely regressive move and would only benefit the very wealthy.

– Greg Noth