The non-partisan Tax Policy Center released an analysis this month showing that, in order for to Mitt Romney to achieve all of the goals he had laid out in his tax plan, he would have to raise taxes on everyone making less than $200,000, including a $2,000 annual tax increase on middle class families. Romney, after first trying to paint the organization as ideologically opposed to him (despite one of the study’s authors being a former official in the George H.W. Bush administration), then took to attacking the study itself.
“There’s an old expression in the computer world: garbage in, garbage out,” Romney said. “They made garbage assumptions and they reached a garbage conclusion.”
The Romney camp complained that TPC “did not sufficiently account for the potential benefits of Mr. Romney’s separate proposals to lower the corporate tax rate to 25 percent from 35 percent, reduce other business taxes and cut domestic spending deeply.” However, TPC re-ran the numbers to include these provisions, and found that they make Romney’s plan even worse for the middle class and low-income Americans:
Governor Romney’s tax advisors told TPC that the (then, as now, unspecified) cuts in corporate tax preferences were not meant to finance the initial rate cut to 25 percent but instead would pay for a subsequent revenue-neutral set of proposals that would reduce corporate rates further and enact a territorial system.
In our analysis, we assumed that Romney’s plan to reduce the rate to 25 percent could be achieved through some unspecified corporate base broadening, and therefore that the revenue and distributional consequences of this rate cut could be ignored in the remainder of our analysis. If, instead, we had included the reduction in the corporate tax rate (which would reduce revenues by $96 billion in 2015 in the absence of base-broadening), the result would have been an even larger tax cut on high-income individuals, requiring even larger cuts to tax expenditures, and correspondingly larger increases in taxes on middle- and/or lower-income taxpayers.
TPC also noted that the spending cuts Romney has in mind would likely hit middle class families the hardest. So between Romney’s plan and vice presidential candidate Paul Ryan’s budget, the GOP ticket has a pair of proposals that would raise taxes on the middle class in order to cut them for the rich.