"Adviser Admits Romney’s Tax Plan Would Redistribute Wealth"
Mitt Romney economic adviser Emil Henry tripled down on the GOP presidential candidate’s claim that 47 percent of Americans are “dependent upon government” and see themselves as “victims” because they don’t pay federal income taxes, during an appearance on MSNBC’s Up with Chris Hayes on Sunday. “You have a president who errs towards, in the very least, an entitlement society, a society of hand downs, a society of 46 million people on food stamps,” Henry said, adding that Romney opposes Obama’s efforts to “redistribute” wealth to those with lower incomes.
He then advocated for Romney’s tax reform plan — which he likened to a flat tax — of lowering the marginal rates by 20 percent across the board and limiting exemptions and deductions for the richest Americans, while providing the middle class with tax relief. “I have heard him say this 100 times and I know this for a fact, he says taxes on rich folks are not going to go down because of the elimination of exemptions,” Henry added.
But when Hayes pointed out the inconsistency of the charge, noting that taxes on wealthy people would have to come down substantially if Romney seeks to eliminate the “redistribution” inherent in America’s progressive tax code, Henry conceded that Republicans would also transfer wealth from one group to another:
HAYES: There is a tension with the nonredistributed thing. Taxes on wealthy people have to go down. If he doesn’t believe in that, he has to reduce the burden of wealthy people. We have a barely, but progressive income tax. If he doesn’t believe in redistribution, he has to cut it for the wealthy. It’s not the case he is flattening the tax code and not lowering them for rich people. [...]
HENRY: If your point is that a progressive tax code, which is what the United States of America has and it’s the right thing, and it’s about fairness and fairness of opportunity, your point is there’s a technical element of redistribution by virtue of hiring –
HAYES: Not just technical — that’s redistribution. You are paying for it!
HENRY: Let’s be real about it. Let’s be real about this. When President Obama talks about redistribution, Chris, you know this is true, when he talks about redistribution, he is talking about a massive difference from the Romney plan, which is about simpler, lower marginal rates, getting rid of exemptions and lowering the corporate tax rate to attract business in America.
In fact, Romney’s economic plan does provide substantial tax cuts to the wealthiest Americans and would redistribute wealth to the already wealthy. According to a Tax Policy Center analysis, the GOP presidential candidate’s proposal would increase after-tax income for those making more than $200,000 annually, while lowering it for everyone else:
“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).”
Romney, however, is arguing that he will raise enough revenue through the elimination of tax loopholes that benefit the rich to totally offset the tax cut he provides them, though an analysis from the Tax Policy Center found that to be a mathematical impossibility. There simply isn’t enough revenue to be generated through the closure of those loopholes to offset the massive cost of Romney’s plan.