Republican presidential candidate Mitt Romney isn’t the only GOP candidate characterizing a plan to slash taxes for the rich and corporations as a tax cut for the middle class. Linda McMahon, the former pro wrestling executive who is running (again) for Connecticut’s open Senate seat, has proposed a plan that would provide a windfall in tax breaks to the rich and corporations, even as she pitches it as a big tax cut for the middle class.
At a debate with her opponent, state Rep. Chris Murphy (D), last night, McMahon claimed that Murphy had misrepresented her plan by describing it as a tax cut for the rich:
MCMAHON: My plan, which you’ve not characterized correctly, calls for keeping all of the tax levels the same except cutting taxes for the middle class.
Watch a news report about the debate, via Connecticut’s WTNH:
http://www.wtnh.com/video_player/swf/EndPlayVideoPlayer_v1_4_FP10_2.swf?v=080912_0
There are numerous problems with how McMahon pitches her tax cut for the middle class. McMahon’s plan would cut only one tax rate, from 25 percent to 15 percent, that primarily affects middle class taxpayers. McMahon claims that will save middle-class taxpayers as much as $500 a month. This is misleading at best: as the Hartford Courant explained, the $500 amount comes from a household income of $125,000, well above the typical family’s income. And savings even for that family only reach $500 if McMahon assumes the full expiration of the Bush tax cuts, including those for the middle class. Both Democrats and Republicans agree that those tax cuts should be maintained, so using that baseline makes little sense.
The typical Connecticut family, the Courant found, would actually save roughly $82 a month, a far cry from the $500 a month McMahon promises.
McMahon’s plan, however, would provide a huge tax cut for the rich and corporations. Like Romney’s plan, it eliminates the estate tax, a $10.6-billion cut that would benefit only the wealthiest Americans, according to the Tax Policy Center. It also lowers the top corporate tax rate from 35 percent to 25 percent (just like Romney’s plan), a proposal that would cost $900 billion over the next decade. And, again like Romney’s plan, it would shift the corporate tax code to a territorial tax system, a plan that would cost another $130 billion, encourage the outsourcing of jobs and the offshoring of profits, and, according to one study, lead to the elimination of 800,000 American jobs.