While Mitt Romney's tax plan isn't as radical as the other Republicans running against him it would still slash taxes for the wealthy while actually increasing taxes on low income workers according to a new analysis published by the Tax Policy Center.
Analysis: Romney tax plan would most benefit wealthy
By Lesley Clark
McClatchy Newspapers
Published: Thursday, Jan. 5, 2012
WASHINGTON — Mitt Romney's tax plan would cut taxes for fewer than half of American households, with the wealthy getting most of the benefits, according to an independent analysis released Thursday.
Some taxpayers at the lower end of the scale — those who make less than $40,000 a year — could face a tax increase under Romney's plan.
Under the presumption that the Bush-era tax reductions are extended — as Romney has proposed — nearly all Americans who make more than $1 million would get tax cuts that average $150,000, the review by the nonpartisan Tax Policy Center found.
From CNN:
Mitt Romney's 'timid' tax plan
The rich would see the most benefit, with individuals in the top 1% receiving a tax cut of more than $80,000, while the average person would get a little more than $1,000 break.
The conservative Economist blasts the Romney tax proposal as a throw back to the 15th Century.
Very progressive, by 15th-century standards
THE Tax Policy Center has completed an analysis of the distributional effects of Mitt Romney's tax plan , and as might be expected it's quite good for you if you're raking in the big bucks, and not particularly helpful if you're not. For the bottom 80% of the income distribution, federal tax rates would drop between 0.6% and 3.4%. For the top 20%, they'd drop 5.9%; for the top 1%, they'd drop 8.6%. That means the regular-joe taxpayer at the middle of the distribution gets a cut of about $1,400, while a taxpayer in the top 1% gets a cut of $171,000. Kevin Drum cracks wise :
[C]onservatives are right to believe that Romney isn't to be trusted. Sure, he lowers tax rates on millionaires by 9 percentage points, and you may think that's a pretty sweet deal for the rich. But come on. Newt Gingrich would lower them by 24 percentage points. (No, that's not a typo.) Rick Perry lowers them by 20 percentage points. Herman Cain lowers them by 15 points. Frankly, Romney is hardly even trying here
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Romney's tax proposal would also dramatically increase the deficit, and increase pressure for more drastic cuts to government programs.
This comes from the Tax Policy Center's rerport:
The Romney Plan
Some people would see their taxes rise relative to the current policy baseline because of the expiration of the American Opportunity Tax Credit and expiration of the expansion of the earned income credit and the child credit enacted in 2009.
The Romney plan would reduce federal tax revenues substantially. TPC estimates that on a static basis, the Romney plan would lower federal tax liability by $600 billion in calendar year 2015 compared with current law, roughly a 16 percent cut in total projected revenue. Relative to a current policy baseline, the reduction in liability would be roughly $180 billion in calendar year 2015.
The Romney plan would change the distribution of the federal tax burden, as shown in these tables.3
From the Wall Street Journal:
Tax Policy Center: Romney Plan Gives Wealthy Big Tax Cuts
By John D. McKinnon
The analysis by the Washington-based Tax Policy Center concluded that Mr. Romney’s plan would reduce taxes significantly for high-income earners (by 6.9% or $146,000 for households making more than $1 million), and increase federal deficits by $180 billion in 2015 compared to current tax levels.
The new analysis by the center, a joint venture of the liberal Brookings Institution and the Urban Institute, contrasts with Mr. Romney’s often-repeated claim that he wants to focus new tax breaks on middle-class taxpayers, not the well-to-do.
“I’d like to get some relief for middle-income taxpayers,” Mr. Romney said at an event in Salem, N.H. “I’m not looking for ways to reduce taxes on the highest-income folks in our society.”
The TPC analysis also concluded Mr. Romney’s plan would raise taxes slightly for low-income families, largely because the former Massachusetts governor would allow some Obama-era tax breaks to expire.
Study: Romney plan raises taxes on poor families (subscription site)
Romney tax plan would balloon U.S. deficit: report
The analysts in the media seem to agree the Romney plan would compound the problem of increasing economic inequality, while ballooning the deficits.
Romney's tax plan would be a huge step backward in income inequality. Romney wants a return to a more primitive economic era with many of the characterless of a plutocracy.
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UPDATE
I am reworking this material for a new Diary.
This topic deserves more discussion IMHO.