Romney’s Tax Plan Would Raise taxes on middle class families by $2000 while cutting taxes on multi-millionaires by $250,000.
Tax Policy Center: Romney Tax Plan Would Raise Taxes On Families With Children With Income Below $200,000 By $2,041. According to a Tax Policy Center analysis of Romney’s tax plan and promises, families with children that earn below $200,000 a year would see tax increases of $2,041. [Tax Policy Center, 8/1/12]
Tax Policy Center: Top 0.1% Would See $246,652 Tax Cut Per Year Under Romney Plan. According to a Tax Policy Center analysis of Romney’s tax plan and promises, the top 0.1% would receive a tax cut of $246,652 per year. [Tax Policy Center, 8/1/12]
The Romney Plan Raises Taxes Of The Middle Class And Poor To Pay For Tax Breaks For The Super-Wealthy
A Brookings Study By Economists With Experience In Both Republican And Democratic Admirations Concluded That Romney’s Tax Plan Would Cut Tax Rates For The Wealthy While Leaving 95 Percent Of Americans With A Net Tax Increase. According to New York Times, “The center is a joint effort of the Urban Institute and the Brookings Institution that includes economists and tax experts with experience in both Republican and Democratic administrations. It concluded that a tax-code overhaul meeting Mr. Romney’s goal — a 20 percent cut in all rates without adding to annual budget deficits — would leave wealthy taxpayers with a large tax cut but 95 percent of Americans with a net tax increase once tax breaks for items like mortgage interest are curtailed to keep deficits in check.” [New York Times, 8/11/12]
Romney’s Tax Plan Would Raise Taxes For 95 Percent Of Americans While Cutting Taxes For The Richest 5 Percent. According to The Washington Post, “Mitt Romney’s plan to overhaul the tax code would produce cuts for the richest 5 percent of Americans — and bigger bills for everybody else, according to an independent analysis set for release Wednesday. The study was conducted by researchers at the Brookings Institution and the nonpartisan Tax Policy Center, who seem to bend over backward to be fair to the Republican presidential candidate. To cover the cost of his plan — which would reduce tax rates by 20 percent, repeal the estate tax and eliminate taxes on investment income for middle-class taxpayers — the researchers assume that Romney would go after breaks for the richest taxpayers first… What would that mean for the average tax bill? Millionaires would get an $87,000 tax cut, the study says. But for 95 percent of the population, taxes would go up by about 1.2 percent, an average of $500 a year.” [The Washington Post, 8/1/12]
Romney’s Tax Plan Would Have To Be Funded By The Elimination Of Tax Breaks Including Tax Credits To Low And Middle Income Families. According to Reuters, “About two-thirds of the $1.1 trillion in revenues that the government foregoes annually because of tax breaks would have to be curbed to fund Romney’s tax cut, the analysts said. These tax breaks include popular ones such as the mortgage interest deduction, the break for employer-provided health insurance, and credits for low- and middle-income families. The analysis assumed elimination of tax breaks would start with the wealthy as Romney has suggested, and it assumed some revenue growth from lower tax rates, a hallmark of Republican tax policy.” [Reuters, 8/1/12]
Erskine Bowles: Romney’s Tax Cut Plan Would Increase Middle Class Taxes. According to The New York Times, “The Republican nominee also has insisted that his huge tax cut proposal — he would reduce the top individual rate to 28 percent from the current 35 percent, lower capital gains and dividend taxes and eliminate the estate tax — could be financed by limiting tax preferences for the wealthy, who would benefit from his tax cuts. Erskine Bowles, the Democratic co-chairman of the committee, said Mr. Romney was wrong; his plan would require middle-class tax increases, too. ‘It’s just not enough money there in getting rid of the tax expenditures that only affect the upper-income people,’ he said in a recent interview on Bloomberg Television.” [The New York Times, 6/24/12]
Romney’s Tax Plan Would Reduce Benefits For Larger Low-Income Families Under The Earned Income Tax Credit. According to Center for American Progress Action Fund, “The Earned Income Tax Credit supplements the earnings of low-income families, rewarding work while offsetting payroll and other taxes. Prior to 2009 families with three or more children received the same tax benefit from the Earned Income Tax Credit as families with two children despite a higher cost of living. A provision enacted in 2009 made such families eligible for an additional benefit, but Gov. Romney’s plan would let that provision, along with another improvement to the credit signed in 2009, expire. A two-parent family raising three children on $30,000 of earnings would lose $1,076 a year.” [Center for American Progress Action Fund, 7/2012]
Romney’s Tax Plan Would Reduce Child Tax Credit Eligibility For The Families Of 15.8 Million Children. According to Center for American Progress Action Fund, “The Child Tax Credit also rewards work while defraying child rearing expenses. Only families with earned income can benefit. The credit is generally $1,000 per child, but families at low-income levels can often claim only a partial credit. President Obama’s 2009 reforms allowed low-income families to claim more of the credit. Gov. Romney’s tax plan would repeal those reforms, resulting in a smaller credit or no credit for the families of 15.8 million children.” [Center for American Progress Action Fund, 7/2012]
Romney’s Tax Plan Reduced The American Opportunity Tax Credit From $2,500 To $1,800 While Limiting To Two Years. According to Center for American Progress Action Fund, “Under the current American Opportunity Tax Credit, families are eligible for a tax credit of up to $2,500 for four years of college (partially refundable for families with no income tax liability). Under Gov. Romney’s plan, credits would be limited to a nonrefundable credit of about $1,800, available only for two years of college.” [Center for American Progress Action Fund,7/2012]
Romney’s Tax Cuts For Super-Rich Are Even Larger Than The Bush Tax Cuts
Romney Would Give Millionaires “Extremely Regressive” Tax Cuts On Top Of The Bush Tax Cuts. According to Center for American Progress Action Fund, “All told, the Romney tax cuts would pile extremely regressive tax cuts on top of the already-regressive Bush tax cuts. Millionaires would receive a tax cut of $250,000 over and above the windfall they are currently receiving from the Bush tax cuts. The top 1 percent would receive an average tax cut of $150,000 and the top 0.1 percent would receive an average tax cut of $725,000.” [Center for American Progress Action Fund, 7/2012]
Romney Tax Cut For Millionaires Would Be Almost Twice The Size Of George W. Bush’s Tax Cut. According to Think Progress, “Mitt Romney’s economic plan calls for a massive tax cut for the rich, even while the plan would likely result in a tax increase on millions of middle class families. And as it turns out, Romney’s tax cuts for the rich would dwarf even those put in place by George W. Bush in 2001 and 2003, as Center for American Progress Director of Tax and Budget Policy Michael Linden noted: Republican presidential candidate Romney’s plan for federal taxation begins with a hefty portion of Bush-era tax policy: Permanently extend all the tax cuts passed in 2001 and 2003, including those that mainly benefit the extremely wealthy. Then Romney layers on a heaping batch of new tax cuts for the rich, including a full repeal of the estate tax—which is currently paid by only the richest 0.14 percent of estates—and a massive corporate tax cut.” [Think Progress, 01/12/12]
Romney Would Not Specify Which Tax Deductions He would Eliminate TO Pay For His Plan, Makes The Arithmetic Of His Plan Impossible
Romney And Ryan Wanted To Eliminate Unspecified Loopholes And Deductions To Pay For Their Lower Tax Rate. According to Associated Press, “With an eye toward undecided voters dismayed by the lackluster recovery, Romney and Ryan faulted Obama for failing to provide the tax relief they say holds the key to the creation of millions of jobs. Romney has pledged to lower tax rates for by 20 percent for all Americans — including the wealthy. Romney has said he’ll pay for those cuts by eliminating loopholes and deductions for higher-income earners. But both Republicans were unyielding in saying that the specifics would come only after the election. ‘Mitt Romney and I, based on our experience, think the best way to do this is to show the framework, show the outlines of these plans, and then to work with Congress to do this,’ Ryan said on ABC’s ‘This Week.’” [Associated Press, 9/9/12]
Romney Would Not Provide Examples Of Loopholes He’d Close, Saying The Rich Would Have “Fewer Deductions And Exemptions.” According to Politico, “But asked by NBC’s David Gregory to name a loophole in the Tax Code that he would close for high-income taxpayers, Romney didn’t provide an example. ‘Well, I can tell you that people at the high end, high-income taxpayers, are going to have fewer deductions and exemptions,’ Romney said. ‘Those numbers are going to come down. Otherwise, they’d get a tax break. And I want to make sure people understand, despite what the Democrats said at their convention, I am not reducing taxes on high-income taxpayers.’” [Politico, 9/9/12]
Romney Would Target Tax Loopholes And Deductions “At The High End” Without Providing Further Specifics. According to New York Times, “Mr. Romney has pledged to cut individual income tax rates for everyone, and to do it without increasing the federal budget deficit or putting new tax burdens on middle-income people to make up for the lost revenues from the rate cuts. But he has provided no further specifics, confounding analysts and leaving himself open to attack from Democrats. Asked on the NBC program ‘Meet the Press’ on Sunday which tax deductions he would eliminate, he said only that he would target ‘some of the loopholes and deductions at the high end’ while lowering the ‘burden on middle-income people.’ … Many independent analysts contend that the only way to raise the revenue Mr. Romney is talking about would be to eliminate breaks like the preferential treatment of investment income or the mortgage-interest deduction. Their position is central to the Democrats’ argument that eliminating tax breaks — called tax expenditures because they often function like government spending programs — would hit the middle class the hardest.” [New York Times, 9/9/12]
Romney’s Campaign Did Not Name Any Tax Deductions He Wanted To Cap Or Close In His Tax Proposal. According to The Washington Post’s Ezra Klein, “Romney has promised a ‘permanent, across-the-board 20 percent cut in marginal rates,’ alongside a grab bag of other goodies, like the end of ‘the death tax.’ Glenn Hubbard, his top economic adviser, has promised that the plan will ‘broaden the tax base to ensure that tax reform is revenue-neutral.’ It is in the distance between ‘cut in marginal rates’ and ‘revenue-neutral’ that all the policy happens. That is where Romney must choose which deductions to cap or close. It’s where we learn what his plan means for the mortgage-interest deduction, and the tax-free status of employer health plans and the Child Tax Credit. It is where we learn, in other words, what his plan means for people like you and me. And it is empty. Romney does not name even one deduction that he would cap or close. He even admitted, in an interview with CNBC, that his plan ‘can’t be scored because those details have to be worked out.’” [The Washington Post, Ezra Klein, 8/6/12]
Romney Only Identified 3 Tax Loopholes Or Deductions He Would Eliminate And All Benefitted Working Families. According to Center for American Progress Action Fund, “Of all of the loopholes, deductions, and tax expenditures in the Internal Revenue Code, Gov. Romney has specifically singled out only three for elimination. All three are tax credits benefiting working families first enacted under President Obama in 2009.” [Center for American Progress Action Fund, 7/2012]
Bloomberg: Romney’s Tax Plan Left Out Details On Tax Breaks He Planned To Curtail. According to Bloomberg, “Romney’s plan to cut income tax rates by 20 percent without increasing the U.S. budget deficit relies on unspecified assumptions about economic growth and unannounced details about the tax breaks he would curtail. The details that Romney hasn’t released will matter as he seeks to claim the mantle of fiscal responsibility while cutting taxes by more than $4 trillion over the next decade. Specific proposals for curbing breaks can hurt the taxpayers who rely on them. Spending cuts can affect core government services. Relying on growth caused by tax cuts is an uncertain strategy that government scorekeepers don’t employ.” [Business Week, Bloomberg, 02/24/12]
Conservatives Call For More Details
George Will: Romney May Avoid Revealing Tax Plan Details Because The Math Does Not Add Up. According to Talking Points Memo, “On ABC’s ‘This Week’ roundtable, prominent conservative columnist George Will hinted at why Romney may not want to reveal his cards: his tax math doesn’t add up. ‘There is uncertainty surrounding the Romney-Ryan tax cut plan, because they have not specified the deductions that will be closed,’ he said. ‘And we know where the big money is: mortgage interest deductions, charitable deductions … employer-provided health insurance, and state and local taxes. All of those, you either hit only the rich, in which case you don’t get much money, or you hit the middle class.’ Will implicitly endorsed the conclusion of a study by the Tax Policy Center, which said Romney won’t be able to recover revenues on the scale he needs to via tax loopholes unless he also targets incomes under $200,000..” [Talking Points Memo, 9/11/12]
Weekly Standard’s Bill Kristol Said It Was Time For Romney To Give Specifics On Spending Cuts And Which Tax Loopholes They Would Eliminate. According to the Huffington Post, “The Romney campaign has repeatedly refused to answer questions about what tax loopholes and deductions it would eliminate and what spending it would cut. Kristol said that it’s time for specifics. ‘When a challenger merely appeals to disappointment with the incumbent and tries to reassure voters he’s not too bad an alternative, that isn’t generally a formula for victory. Mike Dukakis lost,’ he wrote in this week’s column, headlined ‘Speak Up, Mitt!’” [Huffington Post, 9/11/12]
Conservatives Were Critical Of The Romney Campaign’s Secrecy On Issues Like Romney’s Tax Plan. According to Talking Points Memo, “Conservatives are increasingly worried that Mitt Romney’s vagueness about tax reform and other policy issues will be his downfall on Election Day. Romney’s sympathizers are raising red flags, after he and his running mate repeatedly declined to provide details during a round of Sunday interviews about the loopholes he’d close to pay for large tax rate cuts. ‘If you don’t start telling people what you believe — if you really do, in fact, believe in anything — and if you don’t start telling people, yes, these are the tax exemptions that we’re going to get taken care of … unless you have somebody that’s willing to do that, Romney’s going to lose,’ said conservative Joe Scarborough on his MSNBC show Monday… ‘The Romney campaign continues looking schizophrenic,’ wrote Matt Lewis in a Daily Caller blog post about the candidate’s ‘secret’ tax plan. ‘This is problematic. … [T]he possible long-term damage to the already-weakened Republican brand could be incalculable.’” [Talking Points Memo, 9/11/12]
Lack Of Specifics Points To The Romney Plan Being Mathematically Impossible
Tax Analysts Said Romney’s Tax Plan Was Mathematically Impossible To Accomplish. According to New York Times, “The problem, tax analysts say, is that it is mathematically impossible do all three of those things. High-income earners would pay far less as tax rates fell. Even if the Romney campaign eliminated every one of their noninvestment tax breaks and credits, rich families would still not pay what they do today. That raises the question of whether the plan would increase taxes on the middle class, add to the deficit or require less-steep rate reductions. ‘The combination of stuff they’ve specified is not only impossible — it is impossible several times over,’ said William G. Gale, the director of economic studies for the center-left Brookings Institution and a co-author of a definitive Tax Policy Center study on Mr. Romney’s plan, whose arithmetic the Obama campaign is citing.” [New York Times, 9/9/12]
Analysis Of Romney’s Tax Plan’s Effect On Families Was “Close To Impossible” Because Romney’s Campaign Refused To Detail Which Tax Breaks It Would Protect. According to New York Times, “Eliminate the home-mortgage interest deduction (annual cost: $99 billion and rising) and risk that housing prices will plummet just as that sector of the economy is starting to recover. End the deduction for charitable giving (annual cost: $53 billion) and attract the wrath of every hospital chief and museum director. Touch the protections for investment income (annual cost: more than $100 billion) and anger everyone from Wall Street executives to retirees. Given that reality, the campaign has said it would protect some tax breaks — most notably the home-mortgage interest deduction and the investment protections. But it has refused to detail which tax expenditures it would cut, leaving economists and other tax experts guessing and making a definitive analysis of its effects on families, businesses and the economy close to impossible. ‘Everything is on the table,’ R. Glenn Hubbard, a top economic adviser to the campaign, said in an interview, declining to elaborate any further.” [New York Times, 9/9/12]
The Economist: Romney’s Tax Cuts Would Be Difficult To Pay For By Closing Loopholes For The Rich. According to The Economist, “Still, it would be difficult to pay for all his tax cuts simply by closing loopholes for the affluent.” [The Economist, 04/21/12]
The Atlantic: Romney’s Tax Plan Made It “Arithmetically Impossible” For Top 1 Percent To Pay Their Current Tax Rate. According to The Atlantic, Romney claimed to “be tough on the 1%: ‘for middle income families, the deductibility of home mortgage interest and charitable contributions, those things will continue, but for high income folks, we are going to cut back on that so we make sure the top 1% keeps paying, paying the current share they’re paying or more.’ Under current law, which includes the Bush tax cuts, the top 1% in 2011 paid an effective income tax rate of 20.3 percent of their total cash income. Repealing the alternative minimum tax (a Romney proposal) would reduce their effective rate by at least 0.4 percentage points.* A 20 percent cut in income tax rates would knock another 4 percentage points off their tax rate. Repealing the estate tax is worth another 0.3 percentage points of cash income, for a total tax cut of 4.7 percentage points. That works out to a 6.8 percent increase in after-tax income.** […] According to Burman, Geissler, and Toder (2008), eliminating every tax expenditure other than the tax preferences for investment income (which Romney specifically wants to keep) would reduce after-tax income for the top 1% by 6.2 percent. Because Romney would lower tax rates by 20 percent, killing all those tax expenditures — state and local tax deduction, mortgage interest deduction, employer health plan exclusion, deduction for charitable contributions, everything — would only reduce after-tax income for the top 1% by 5 percent.* The bottom line is that if, like Mitt Romney, you want to cut tax rates by 20 percent, eliminate the estate tax, and eliminate the AMT, it is arithmetically impossible for the top 1% to pay anything close to their current effective tax rate.” [The Atlantic, 02/23/12]
Published: Oct 2, 2012