Another Romney Whopper
During the first debate, Romney claimed that he could cut
personal tax rates without increasing the deficit because the rate cuts would
be offset by the elimination of tax expenditures (loopholes). An analysis by the Tax Policy Center (TPC)
indicates that this is, indeed, possible but that Governor Romney failed to
mention a couple of minor details – only people earning more than $200,000 a
year would see their taxes reduced and the magnitude of the reduction would be
greatest for those with the highest income[1]. Now the only cut that Romney has so far been
willing to divulge that he would definitely cut Federal funding of the Public
Broadcasting System (thereby reducing
the deficit by 1/100 of 1%).
Since Romney has doggedly refused to release any other
details about the “loopholes” that he would eliminate, the TPC has done their
analysis following two basic principles:
(1) certain tax breaks were taken off the table based on TPC’s analysis
of political realities and (2) they tried
to maximize the benefits to lower income taxpayers by first eliminating tax
breaks that most benefited the wealthy[2]. In spite of this effort to make the changes
as progressive as possible, the overwhelming share of the tax reductions still
wound up going go to the very wealthy.
Peons who earn less than $200,000 a year would actually end up with a tax
increase (Figure 3).
The dishonesty and cynicism involved here is simply
breathtaking. One can only hope that
such mendacity will not be rewarded with the Presidency.
A final note: In
dismissing the TPC analysis, Romney glibly allowed as how he could come up with
just as many studies supporting his position and cited one study from an
“independent, bipartisan, think tank”.
Turns out that the organization he was referring to is the American
Enterprise Institute By this standard, Rush Limbaugh and Bill O’Reilly are raging liberals.
[1] The full
report from the TPC is available at: http://www.brookings.edu/research/papers/2012/08/01-tax-reform-brown-gale-looney
[2] The main tax
breaks that were taken off the table were:
preferential rates on capital gains
and dividends;
exclusion of income accrued in
qualified retirement savings accounts;
pensions (e.g., Traditional and Roth
IRAs, 401k plans, defined benefit pensions);
the step-up basis at death;
