It's all about the Math, people. Some have it. Some don't.
by Associate Press, CNBC.com -- Oct 13, 2012
Such critics [of Romney's Plan] were given a boost on Friday when the nonpartisan tax analyst for Congress released a study that says eliminating all itemized deductions would pay for just a 4 percent cut in tax rates -- far below Romney's 20 percent target.
Republicans pointed out that the Joint Committee on Taxation analysis was simply a sketchy outline of tax reform concepts and that there are very big differences between the panel's assumptions and the Romney plan. For starters, the congressional study started from a narrower set of tax breaks from which to finance the rate cuts.
However, wiping out every tax deduction -- including those for mortgage interest, for state and local taxes and for charitable giving, but leaving breaks for health insurance and retirement savings or the personal exemption alone -- would raise $2.5 trillion over a decade, just about half of the cost of Romney's plan.
Here's a "plain English" take of what this New report is saying, as just posted to Bloomberg News:
by Richard Rubin and Heidi Przybyla Bloomberg News -- Oct 13, 2012
While there are major differences between the assumptions underlying Romney’s plan and the JCT study, the findings emphasize shortcomings in Romney’s approach, said Daniel Shaviro, a tax law professor at New York University.
“There really is no serious dispute that the parameters of their plan can’t be met,” Shaviro said. “It’s like saying you’re going to drive from Boston to Los Angeles in 10 hours without speeding. There’s just no way to make the numbers add up.”
In short by eliminating All itemized deductions -- it would only support a 4% across the board Tax Cut
-- it in no way supports the 20% across the board Tax Cut, that Romney has previously proposed.
Romney's Plan will fall far short of his stated goals, according to this nonpartisan tax analysis report. At least 80% short of filling that new $5 Trillion Romney-crater, in even "the best" of deduction scenarios. (Best for Mitt, not best for us.)
Put on those propeller-caps, people. Here are the wonky details from this new report itself.
It seems a lot is also riding on whether or not you include the Bush Tax Cuts -- as part of your baseline. Romney does. The Joint Committee on Taxation does not include them. JTC assumes there will be "extra Revenues" from the long-overdue sunsetting of this GW Bush Legacy.
Joint Committee on Taxation: Base-broadening tax reform is really hard (embedded JCT report)
by Dylan Matthews, washingtonpost.com -- Oct 12, 2012
The Joint Committee on Taxation is one of the most respected institutions in Washington. It is to the tax code what the CBO is to the budget: a nonpartisan, impartial arbiter that produces respected estimates of revenues and other figures important to tax policy.
Most jarringly, the 4 percent cut is calculated relative to a baseline where almost all the Bush tax cuts expire, rather than the policies in effect today. Romney, by contrast, wants a 20 percent cut relative to the Bush rates, and given that few expect the Bush tax cuts will lapse in their entirety, the relevance of the baseline JCT uses is questionable. But the baseline if anything makes the study too optimistic. Deductions are worth more when tax rates are higher, so you could generate less revenue from cutting them if you used a baseline with the lower, Bush-era rates. So the same study with a more appropriate baseline would come up with even more modest rate cuts.
In other words, the Joint Committee on Taxation is understating just how far Romney's Trickle-Down nonsense will actually fall short. If Willard (W2) ever gets a chance to finish -- what GW started.
Yup, the Economy could use another $4 Trillion Dollar Crater -- you betcha.