The Tax Policy Center yesterday released its analysis of 2012 GOP presidential contender Newt Gingrich’s “flat” tax plan, which calls for an optional 15 percent personal income tax, as well as the elimination of taxes on capital gains and inheritance. According to TPC, Gingrich’s plan would give millionaires a $600,000 annual tax cut, letting them pay a lower tax rate than middle-class families.
Overall, Gingrich’s plan gives half of its benefits to the richest one percent of taxpayers. And as it turns out, this is nothing new for Gingrich.
In 1998, Gingrich released a plan to spend $1 trillion of the surplus engineered under President Clinton on a tax cut. A Citizens for Tax Justice analysis released at the time found that Gingrich’s plan would have given 60 percent of its benefit to the richest two percent of taxpayers, while giving middle-class families a whopping 75 cents in tax relief per week:
The fact that Speaker Gingrich’s suggested tax cuts are so heavily tilted toward the very top of the income scale makes his plan even more troubling. Our analysis of the three key tax changes the Speaker has mentioned finds that:
— 60 percent of the tax cuts would go to the two percent of taxpayers making more than $200,000 a year.
— The average tax cut in the over $200,000 group would exceed $17,600 per year.
— In contrast, less than 5 percent of the Speaker’s tax cuts would go to the 70 percent of taxpayers making less than $50,000 a year. The average tax cut for these taxpayers would be only $39 a year, or 75 cents a week.
It seems that in the last 13 years, Gingrich has decided that the major flaw in his plan was not giving a big enough tax break to the rich, so he upped the ante with his latest proposal, even as more evidence comes out showing that tax cuts for the rich don’t actually trickle down to help the rest of the economy. It’s worth remembering that Gingrich warned in 1993 about the horrifying effects President Clinton’s tax policy would have on the economy — instead, Clinton’s policies helped usher in the longest sustained period of economic growth in the nation’s history, with 23 million jobs created.