"How Romney’s Economic Plan Redistributes Wealth To The Wealthy"
Mitt Romney yesterday attempted to turn attention away from the fallout of his comments regarding the “47 percent” by pointing to a video from 1998 in which President Obama, then a state senator, says, “I actually believe in redistribution, at least at a certain level to make sure everybody’s got a shot.” The video was aggressively pushed by the Drudge Report and was detailed in a Romney campaign memo today.
This video doesn’t show much of anything new: President Obama has consistently advocated for higher tax rates on the rich, a position most Americans support, and more support for low-income Americans.
Romney’s response also ignores that his own economic plan would redistribute wealth too — Romney would just redistribute it to the already wealthy.
According to a Tax Policy Center analysis, Romney’s plan would increase after-tax income for those making more than $200,000 annually, while lowering it for everyone else:
The upshot of Romney’s plan is that “taxpayers with incomes over $1 million would see their after-tax income increased by 8.3 percent (an average tax cut of about $175,000), taxpayers with incomes between $75,000 and $100,000 would see somewhat smaller increases of about 2.4 percent (an average tax cut of $1,800), while the after-tax income of taxpayers earning less than $30,000 would actually decrease by about 0.9 percent (an average tax increase of about $130).”
This analysis made the most generous assumptions about Romney’s plan, factoring in that he would eliminate tax deductions and loopholes in the most progressive way possible in order to finance his tax cut. And still, it would constitute a dramatic shift in income to the already wealthy.
According to the latest data from the Census Bureau, income inequality increased last year, despite ongoing government efforts to combat the Great Recession. Romney’s plan would make that trend even worse.