Romney Tax Balloon

August 29th, 2012

Inspired by Romney’s Tax Plan Can Raise Revenue (Martin Feldstein, WSJ 8/29/12), Mr. Romney’s still-fuzzy tax math (WashingtonPost.com 8/29/12), and Yes, Romney’s Tax Plan Requires A Middle-Class Tax Increase (ThinkProgress.org 8/29/12).

 

“The IRS data show that taxpayers with adjusted gross incomes over $100,000 (the top 21% of all taxpayers) made itemized deductions totaling $636 billion in 2009. Those high-income taxpayers paid marginal tax rates of 25% to 35%, with most $200,000-plus earners paying marginal rates of 33% or 35%. And what do we get when we apply a 30% marginal tax rate to the $636 billion in itemized deductions? Extra revenue of $191 billion—more than enough to offset the revenue losses from the individual income tax cuts proposed by Gov. Romney.” – Martin Feldstein

 

In an attempt his media message to fine-tune,

Romney’s camp has floated a new trial balloon.

Martin Feldstein has released it into the sky

In the hope that that balloon will fly.

 

But as shown by the above quote

That balloon can only float

If you people earning $100K with the “wealthy” equate.

Sorry, Mitt, but I think your balloon is starting to deflate.

***

The non-partisan Tax Policy Center concluded that Mitt Romney’s tax plan would as a mathematical necessity result in tax increases on the middle class. Feldstein’s article is an attempt to contradict by claiming that Romney’s revenue gap can be closed by eliminating tax loopholes for those making over $100KAGI. Even if those assumptions and calculations are true, that brings up several important questions:

1) Is that what Romney’s going to do? If so, why doesn’t he say so,

2) Do voters making under $100K trust that’s what would happen and that their taxes wouldn’t be raised?

3) Do voters making between $100-200K want to pay higher net taxes so that millionaires and billionaires can be given a tax cut?

4) Even if Romney promised not to raise net taxes on anyone making under $100K, doesn’t that mean that he might (or would) still cut enough of their deductions to eliminate all or most of their nominal 20% tax cut?

5) Isn’t someone making $100K/year for a family of four middle class?

If this is all the case, that no-reduction tax reduction be a lot less attractive to EVERYONE earning less than $200K. Those earning under $100K would at best pay the same taxes and see no reduction. Those earning $100-200K (in most parts of the country, still the middle class) would pay higher taxes. Only the rich ($200K+ earners) would win, with the super-rich benefiting the most.

This is obviously a trial balloon. The question is: will it float? And while Feldstein is attempting to push back against theTaxPolicyCenteranalysis, he actually confirms its basic conclusions.

Do I detect the hiss of air of a trial balloon deflating?

 

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Posted in Economy, Republicans | 3 Comments »

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3 Responses to “Romney Tax Balloon”

  1. Newsericks » Blog Archive » Take Your Time Says:

    […] impossible assumptions. They were the Romney-Ryan campaign’s attempt to counter the non-partisan Tax Policy Center report that the only way to make Romney’s tax plan revenue-neutral would be to eliminate deductions that […]

  2. Newsericks » Blog Archive » My Studies Says:

    […] Have tried to shore up his tax plan with six pseudo-studies? […]

  3. Newsericks » Blog Archive » Lie-namic Scoring Says:

    […] that those lower rates would generate would magically result in increased revenue. Now, as Mitt’s math has increasingly come under attack, Romney has rhetorically switched to include that magical new revenue into his revenue-neutral […]

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