"Romney Cites Study Based On Repealing Almost All Middle Class Tax Breaks To Bolster His Tax Plan"
Mitt Romney has been desperately trying to refute a study by the Tax Policy Center showing that he can’t mathematically achieve his goals of reducing income tax rates while shielding the middle class from a tax increase and not adding to the deficit. If Romney is committed to his rate reduction and deficit neutrality, he would have to raise middle class taxes by $2,000, even under the most generous assumptions.
So now the Romney campaign is touting a 2006 study from the congressional Joint Committee on Taxation that he claims vindicates his approach, telling Roll Call the study shows “how a ‘Romney-style tax plan’ could bolster growth.” According to the study, tax reform that eliminates deductions and loopholes and reduces income tax rates will slightly increase economic growth over a decade. But the study assumes that nearly all middle class tax breaks — including those for children, mortgages, and employer contributions for health care — are repealed in their entirety:
Under the proposal, all personal exemptions, itemized deductions, personal credits except for the earned income credit, and all above-the-line adjustments to income except for retirement savings deductions and the deduction for self employment taxes would be repealed. The largest categories of deductions repealed are present-law deductions for home mortgage interest expenses, State and local taxes, and charitable contributions. In addition, the exclusions for certain employee fringe benefits, such as employer contributions for health and life insurance, would be repealed. The standard deduction would remain.
The study also found that such a plan would result in the “redistribution” of income tax liability from high-income earners to the middle class. And the promised job growth is only between 1 and 2 percent over ten years (one to two million jobs), while Romney promises that his tax plan will create seven million jobs over four years.
Romney’s claims about job creation under his tax plan are almost entirely fabricated. An economic adviser for both the Reagan and George H.W. Bush administrations said this week that Romney’s tax plan won’t create jobs.