Mitt Romney proposes reducing tax brackets by 20% and cutting the estate tax (to zero IIRC). He will keep or expand favored treatment of capital gains and dividends. He claims that he doesn’t plan to cut taxes for the rich. He claims that he will avoid such cuts by eliminating deductions, credits and exclusions. One of his claims must be false as they are arithmentically inconsistent.
update: Beyond parody. Romney aid Lanhee Chen says that the Tax Policy Center conclusion that Romney’s proposal is gives to the rich is “biased” because it ignores Romney’s proposed corporate income tax cuts
“The study analyzes only half of Governor Romney’s tax program, ignoring the reforms that would make America’s corporations more competitive by moving from the highest corporate tax rate in the industrialized world to one that is comparable to our trading partners.”
Yep that’s the way to convince the public. Note that, in addition to tax cuts for rich people, there are tax cuts for corporations. Importantly Chen does not deny that Romney lied when he said he didn’t seek tax cuts for the rich. Chen’s line is the usual supply side trickle down line that tax cuts for the rich and for corporations will help the non rich by causing greater growth. I know of no evidence which supports this claim.
I almost feel sorry for the Romney campaign.
I can’t keep track of his lies (hell Steve Benen has trouble). Wouldn’t it be easier to keep track of his non-lies ?
A new report from the Brookings Institution and the Tax Policy Center includes the following.
The key intuition behind our central result is that, because the total value of the available tax expenditures (once tax expenditures for capital income are excluded) going to high-income taxpayers is smaller than the tax cuts that would accrue to high-income taxpayers, high-income taxpayers must necessarily face a lower net tax burden. As a result, maintaining revenue neutrality mathematically necessitates a shift in the tax burden of at least $86 billion away from high-income taxpayers onto lower- and middle-income taxpayers. This is true even under the assumption that the maximum amount of revenue possible is obtained from cutting tax expenditures for high-income households.
Amazingly, even if they accept Greg Mankiw’s estimates of the effect of rate cuts on growth (which assumes no increase in the deficit even in the short run). They still conclude that a Romney claim must be false.
Nevertheless, even if one were to use the model from Mankiw and Weinzierl (2006) and assume that after five years 15 percent of the $360 billion tax cut is paid for through higher economic growth, the available tax expenditures would still need to be cut by 56 percent; on net lower- and middle-income taxpayers would still need to pay higher taxes.
This analysis will come as a complete shock to exactly zero Angrybear readers (including the conservatives) but might stimulate discussion in comments.
* Title corrected. The Tax Policy Center is a joint center of the Brookings Institute and the Urban Institute not a separate entity.