"[I]t is not possible to design a revenue-neutral plan that does not reduce average tax
burdens and the share of taxes paid by high-income taxpayers under the conditions described
above, even when we try to make the plan as progressive as possible."
With this statement, a new report from the Brookings Institution and the Tax Policy Center blows the lid of the even the scant tax plan promoted by Gov. Romney. You can read the full report here and the article in the Washington Post here, but the punchline is this: If you do what Romney wants to do to the tax code and then try and make it revenue neutral you will end up increasing the tax burden on people making less than $200,000 a year, while reducing the tax burden on those making more than $200,000.
In order to achieve revenue neutrality we would have to eliminate the mortgage interest tax credit, eliminate tax breaks on employer-funded health insurance, tax breaks against state and local income, and child care tax breaks. While that might be sound economic advice, all those tax breaks are very popular with the middle class. The Washington Post reports the tax burden for 95% of population would increase by 1.2% under Romney's plan.
I'll be updating throughout the day with more analysis, but something to start your morning off.
Updated 12:02pm: From Matt Yglesias writing at Slate, "Raising taxes on the rich and middle class alike in order to afford spending on social insurance, education, and infrastructure is one thing. Raising taxes on the middle class in order to afford tax cuts for the rich is another."
Updated 11:50am: Wonkblog has a post up on the Romney tax plan and a GOP Congressional alternative, "Romney can take some solace in knowing his allies in Congress have proposed a plan that shifts the burden from high-income to middle-income taxpayers even more dramatically. A new paper by Chuck Marr and Chye-Ching Huang at the Center for Budget and Policy Priorities looks at the distributive impact of the Pathway to Job Creation Through a Simpler, Fairer Tax Code Act of 2012, the proposal introduced by Senate Minority Leader Mitch McConnell (R-Ky.) and House Ways and Means chairman David Camp (R-Mich.), and included in the 2013 House Republican budget, that would set a framework for tax reform."
Updated 11:17am: Think Progress weighs in the Brookings Report, "On several occasions, Romney has denied that his tax plan would provide a big tax break to the wealthy. But as this analysis shows, even giving him all of the benefit of the doubt when it comes to eliminating deductions, the plan is still a massive tax break for the rich." (h/t @_al_man)
burdens and the share of taxes paid by high-income taxpayers under the conditions described
above, even when we try to make the plan as progressive as possible."
With this statement, a new report from the Brookings Institution and the Tax Policy Center blows the lid of the even the scant tax plan promoted by Gov. Romney. You can read the full report here and the article in the Washington Post here, but the punchline is this: If you do what Romney wants to do to the tax code and then try and make it revenue neutral you will end up increasing the tax burden on people making less than $200,000 a year, while reducing the tax burden on those making more than $200,000.
In order to achieve revenue neutrality we would have to eliminate the mortgage interest tax credit, eliminate tax breaks on employer-funded health insurance, tax breaks against state and local income, and child care tax breaks. While that might be sound economic advice, all those tax breaks are very popular with the middle class. The Washington Post reports the tax burden for 95% of population would increase by 1.2% under Romney's plan.
I'll be updating throughout the day with more analysis, but something to start your morning off.
Updated 12:02pm: From Matt Yglesias writing at Slate, "Raising taxes on the rich and middle class alike in order to afford spending on social insurance, education, and infrastructure is one thing. Raising taxes on the middle class in order to afford tax cuts for the rich is another."
Updated 11:50am: Wonkblog has a post up on the Romney tax plan and a GOP Congressional alternative, "Romney can take some solace in knowing his allies in Congress have proposed a plan that shifts the burden from high-income to middle-income taxpayers even more dramatically. A new paper by Chuck Marr and Chye-Ching Huang at the Center for Budget and Policy Priorities looks at the distributive impact of the Pathway to Job Creation Through a Simpler, Fairer Tax Code Act of 2012, the proposal introduced by Senate Minority Leader Mitch McConnell (R-Ky.) and House Ways and Means chairman David Camp (R-Mich.), and included in the 2013 House Republican budget, that would set a framework for tax reform."
Updated 11:17am: Think Progress weighs in the Brookings Report, "On several occasions, Romney has denied that his tax plan would provide a big tax break to the wealthy. But as this analysis shows, even giving him all of the benefit of the doubt when it comes to eliminating deductions, the plan is still a massive tax break for the rich." (h/t @_al_man)
