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Today's Top News
Mathematics Impossible: Economists, Analysts Pile On Romney's Bogus Tax Plan
The Tax Policy Center, after assessing Mitt Romney's tax reform proposal this week, said flatly that the plan "would provide large tax cuts to high-income households, and increase the tax burdens on middle- and/or lower-income taxpayers."
Paul Krugman, who noted that Obama's plan was "inadequate" because it raised only $80 billion in additional revenue in an economy that demands increased revenue and government spending, compared it to a Romney plan which he called "intensely, screamingly irresponsible" and said it would generate lost revenue close to $450 billion.
The Economic Policy Insitute's Ethan Pollack called the plan "not serious" because its stated goal -- to lower the deficit by cutting taxes for the wealthiest Americans -- "isn’t mathematically possible."
Challenging Romney's statement that unlike President Obama, he would put his tax plan "on the table," the Washington Post's Ezra Klein says the Romney has does exactly the opposite with his proposal:
The truth is that Romney is afraid to put his plan on the table. He has promised to reduce the deficit, but has refused to identify the spending he would cut. He has promised to reform the tax code, but has refused to identify the deductions and loopholes he would eliminate. The only thing he has put on the table is dessert: a promise to cut marginal tax rates by 20 percent across the board and to do so without raising the deficit or reducing the taxes paid by the top 1 percent.
And Klein concludes with the same two words as Pollack when it comes to his overall assessment of Romney's plan: "mathematically impossible."
The main component of Romney's plan is to lower the rate for the nation's wealthiest from 35% to 28% percent, but the critics argue there is simply no way he can make up that revenue with limiting or eliminating "unspecified tax expenditures" as he proposes.
"Romney is scamming voters," says Krugman,"claiming not only that he can make up the lost revenue by closing unspecified loopholes, but that he can do so in a way that doesn’t shift the tax burden away from the rich onto the middle class. He can’t, as a matter of sheer arithmetic — which is the point of that Tax Policy Center study."
Pat Garofalo, writing at ThinkProgress, discusses how the Tax Policy Center report shows that approximately 95% of US taxpayers would see a tax increase if Romney's plan was introduced: "if Romney were to actually implement his plan to reduce tax rates by 20 percent while eliminating tax deductions in order to pay for it, taxpayers with more than $200,000 would certainly see a tax cut. But everyone else — 95 percent of Americans — will see their taxes increase."
And, directly from the report:
Because taxpayers above $200,000 as a group have received a net tax cut, revenue neutrality requires that taxpayers below $200,000—about 95 percent of the population—experience a tax increase.
Here’s how the plan would affect the average taxpayer in each income group. As the column labeled “revenue neutral” shows, all taxpayers making less than $200,000 would see their taxes go up by hundreds, if not thousands, of dollars. In particular, families with children would see their taxes go up by $2,041, on average:
According to an earlier study of the Romney tax plan by the Center on Budget and Policy Priorities, the presidential hopeful would, if his promise to remain revnue neutral was realized, make "extraordinarily large cuts in other programs, both entitlements and discretionary programs." In other words, the cost of lowering the tax rates for the richest American's would necessitate dramatic cuts to Medicare, Medicaid, Social Security, and other essential programs.
To these and other criticism, says Krugman, the Romney campaign doesn't even try to make substantive arguments.
A report at TalkingPointsMemo, quoted a Romney aide as calling the Tax Policy Center's report "biased," but the campaign "offered no indication they plan to offer more details on Romney’s plan in order to clarify how it would be paid for and what they assume its effects would be."
"Even if [some people] approve of Romney’s policy thrust," said Krugman, voters "should be appalled by the cynicism and contempt for [them] on display."
And Pollack concludes, "the next time you hear Romney or Ryan talking about how they’re going to cut rates and broaden the base, keep in mind that there’s one element of the plan that they’re leaving out: the rich will pay less and everyone else will pay more."