The tax plan proposed by the virtual Republican presidential candidate, Mitt Romney, will lead to fiscal imbalances. The cuts proposed for the wealthiest are so high that in order to offset the negative impact on the deficit, more than 90% of the country’s taxpayers will experience an increase in their taxes.
This is the conclusion of a bipartisan report released by the Tax Policy Center that analyzed the Romney tax plan. In general terms, the proposed plan extends the Bush-era tax cuts, and eliminates taxes on investment income and estate tax among others reductions. At the same time, the plan intends to offset the loss in federal income that this will cause, projected to be close to $360 billion in 2015, by a combination of closing tax loopholes and an supposed economic boom created by the tax cuts.
The report shows that closing tax loopholes used by the wealthiest is not enough to offset the federal tax revenue loss. In order to do that, 72% of all individual tax deductions would need to be eliminated, most of which help the pocketbooks of lower and middle-income taxpayers. The end result, according to the report, would be an 4.1% increase in the income of those making a million dollars or more and a 1.2% decrease for those making less than $200,000.
Romney’s staff rejected the study calling it a “joke” with partisan roots, forgetting that just a few months back, they praised the very same research center when it released a devastating analysis of the tax plan of Romney’s former rival, Rick Perry.
There is no question that throughout the Republican primary a host of absurd tax plans were proposed, including one candidate’s 9-9-9 plan. But now it is Romney’s proposal that is getting more scrutiny and this analysis is the result.
What bothers the Romney camp the most about the report is that the supposed economic boom brought on by the tax cuts was not taken into account. In Romney’s plan, this boom is taken as an act of faith with little explanation. In fact, there is little basis in reality to this theory, which is more myth than anything else.
We believe that in this case, as with the questions surrounding his personal taxes, the appropriate response would be for Romney to demonstrate that he is correct, to back up his arguments, and to prove that his critics are wrong, instead of simply accusing them of being against him.