A recent Tax Policy Center analysis shows that the the kind of revenue-neutral tax reform Romney is advocating is nothing but a wolf in sheep’s clothing. The rhetoric sounds good but the numbers reveal the long-standing Republican lie that it’s the party of lower taxes for the wealthy. Romney’s tax proposal is strongly regressive rather than progressive, and by cutting the rates for the wealthiest Americans broadens the tax burden for the middle class.
Check out their graph of the numbers that don’t lie:
Here are some eye-opening excerpts from the Tax Policy Center, a non-partisan think tank:
“Our major conclusion is that a revenue-neutral individual income tax change that incorporates the features Governor Romney has proposed – including reducing marginal tax rates substantially, eliminating the individual alternative minimum tax (AMT) and maintaining all tax breaks for saving and investment – would provide large tax cuts to high-income households, and increase the tax burdens on middle- and/or lower-income taxpayers. This is true even when we bias our assumptions about which and whose tax expenditures are reduced to make the resulting tax system as progressive as possible. For instance, even when we assume that tax breaks – like the charitable deduction, mortgage interest deduction, and the exclusion for health insurance – are completely eliminated for higher-income households first, and only then reduced as necessary for other households to achieve overall revenue-neutrality– the net effect of the plan would be a tax cut for high-income households coupled with a tax increase for middle-income households.”
“In addition, we also assess whether these results hold if we assume that revenue reductions are partially offset by higher economic growth. Although reasonable models would show that these tax changes would have little effect on growth, we show that even with implausibly large growth effects, revenue neutrality would still require large reductions in tax expenditures and would likely result in a net tax increase for lower- and middle-income households and tax cuts for high- income households.”
As Matthew Yglesias said in Slate’s online reporting of Romeny’s tax lies: “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.” I could not have said it better myself.