Right about what Romney's Tax Plan will do to the Economy. A new non-partisan study says Romney's Tax Plan doesn't add up.
First the relevant points about this from the first Presidential Debate:
PRESIDENT OBAMA: So, all of this is possible. Now, in order for us to do it, we do have to close our deficit, and one of the things I'm sure we'll be discussing tonight is, how do we deal with our tax code, and how do we make sure that we are reducing spending in a responsible way, but also how do we have enough revenue to make those investments? And this is where there's a difference because Governor Romney's central economic plan calls for a $5 trillion tax cut, on top of the extension of the Bush tax cuts, so that's another $2 trillion, and $2 trillion in additional military spending that the military hasn't asked for. That's $8 trillion. How we pay for that, reduce the deficit and make the investments that we need to make without dumping those costs on the middle-class Americans I think is one of the central questions of this campaign.
[...]
MR. ROMNEY: Well, sure. I'd like to clear up the record and go through it piece by piece. First of all, I don't have a $5 trillion tax cut. I don't have a tax cut of a scale that you're talking about. My view is that we ought to provide tax relief to people in the middle class. But I'm not going to reduce the share of taxes paid by high-income people. High-income people are doing just fine in this economy. They'll do fine whether you're president or I am.
[...]
PRESIDENT OBAMA: Now, Governor Romney's proposal that he has been promoting for 18 months calls for a $5 trillion tax cut on top of $2 trillion of additional spending for our military. And he is saying that he is going to pay for it by closing loopholes and deductions. The problem is that he's been asked a -- over a hundred times how you would close those deductions and loopholes and he hasn't been able to identify them.
[...]
MR. ROMNEY: But let's get to the bottom line. That is, I want to bring down rates. I want to bring down the rates down, at the same time lower deductions and exemptions and credits and so forth so we keep getting the revenue we need.
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Not so fast Mitt -- there's not enough
Tea Loopholes in China to fill the new Revenue-crater your plan will create.
Your Math Mitt -- just doesn't add up.
There's not enough Deductions in the USA either Mitt -- to pay for the Tax holiday you have been promising.
Obama, Romney Tax Plans: A Real Case of 'Go Figure'
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 reported by Bloomberg News:
Ending Deductions Pays for 4% Tax Cuts: Study
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.”
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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 previous 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.)
It seems a lot of these projected 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 (links to 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
The Sequel of Trickle-Down: Part II will actually fall short.
Even IF you'd get rid of ALL Itemized Deductions -- you still put a $4 Trillion Dollar Crater in the Economy if you run with Mitt's 20% across the board tax cuts. (5T - 20%*5T = 4T)
Obama was Right. Romney was Wrong.
Mitt's Magic Math just doesn't Add up. Abbaca-dabra-fooey!
You might say Mitt Romney is full of Malarkey! This nonpartisan report does.