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Mitt Romney's Secret Fundraiser Remarks Put The Lie To Supply-Side Economics

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WASHINGTON -- Lying just beneath Mitt Romney's dismissal of nearly half the electorate at a high-dollar fundraiser in May is an admission not as immediately damaging, but perhaps more important in the long run.

Romney told his donors back then that his campaign's political calculation assumes people who do not pay federal income taxes will not be interested in a candidate who proposes tax cuts. But that ignores the decades-long argument that the GOP has employed on behalf of tax cuts -- that wealth in the private sector will "trickle down" and spur economic growth, and therefore benefit everybody. If trickle-down economics is true, Romney should have no problem selling it to all the people who will supposedly benefit.

Unless he doesn't buy it either.

"The president starts off with 48, 49 -- he starts off with a huge number. These are people who pay no income tax -- 47 percent of Americans pay no income tax -- so our message of low taxes doesn't connect. So he'll be out there talking about tax cuts for the rich. I mean, that's what they sell every four years. And so my job is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives," Romney said.

Romney's confidence in his own ability to redeem his fellow citizens aside, suggesting that "our message of low taxes doesn't connect" with half the country is a rejection of the argument on which Romney has built his campaign, that lowering taxes for "job creators" benefits the poor and middle class by spurring job creation.

If Romney does believe that the 47 percent he identified will benefit from supply-side tax policies, then the argument he made to his donors is that the voters simply don't understand they will benefit and that it's not possible for him to make the case to them.

Neither interpretation is flattering to the former Massachusetts governor.

Romney's remarks were made at a $50,000-per-plate fundraiser in Boca Raton, Fla., in May, and recorded with a hidden camera.

Steven Fazzari, a professor of economics at Washington University in St. Louis, wonders why Romney thinks people can't understand the policies he's proposing.

"The comments implicitly insult the intelligence of the 47 percent," Fazzari said. "Supposedly, Romney believes that his policies will create jobs and raise incomes across the population according to the 'rising tide raises all boats' dictum. But the logic revealed by these comments implies that he believes nearly half of voters cannot figure this out. An alternative interpretation would be that these people can figure out what is going on; they just disagree that the policies really will benefit them."

The Romney campaign wasn't immediately available to defend trickle-down economics, but in the wake of the video's disclosure, spokeswoman Gail Gitcho said that Romney's goal is to grow the economy and reduce the number of Americans on "government dependency."

"Mitt Romney wants to help all Americans struggling in the Obama economy," she said. "As the governor has made clear all year, he is concerned about the growing number of people who are dependent on the federal government, including the record number of people who are on food stamps, nearly one in six Americans in poverty, and the 23 million Americans who are struggling to find work. Mitt Romney's plan creates 12 million new jobs in four years, grows the economy and moves Americans off of government dependency and into jobs."

At a fundraiser on Wednesday, Romney returned to his opposition to "redistribution," which he said has "never been a characteristic of America." (In fact, the current progressive taxation regime relies on redistribution, although not from private equity managers.)

Obama "really believes in what I'll call a government-centered society. I know there are some who believe that if you simply take from some and give to others, then we'll all be better off. It's known as redistribution. It's never been a characteristic of America. There's a tape that came out just a couple of days ago where the president said yes, he believes in redistribution. I don't. I believe the way to lift people and help people have higher incomes is not to take from some and give to others, but to create wealth for all," Romney said.

“This idea of redistribution follows from the idea that if you have a business, you didn't build it; someone else did that," he continued. "It's the same concept -- that see, government is responsible for everything that's gone on here. And therefore government can take and give as it chooses. It's an entirely foreign concept that will not work, that has not worked, that has never worked anywhere in the world. And what we have to do in America is not to make us more like Europe, but to make America more like America."

This story has been updated to include comment from professor Steven Fazzari of Washington University in St. Louis.

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