On August 1, 2012, Rick Ungar writes an op-ed in Forbes questioning the study by the Tax Policy Center––a joint venture of the Brookings Institution and the Urban Institute––as be really non-partisan.
Romney’s tax plan will result in “large tax cuts to high-income households, and increase the tax burdens on middle- and/or lower-income taxpayers.”
For starters, the report keys its results on Governor Romney’s promise that any tax cuts provided will be ‘revenue neutral’—meaning that every dollar he cuts in taxes will be paid for by either increasing revenue from some other source or cutting expenses somewhere else on the balance sheet.
While Romney has gone on record as saying that he will produce the revenue neutral result by eliminating deductions and tax code loopholes, he has—to date—declined to be specific in stating exactly what deductions and loopholes he will do away with to make it all work.
The good news? Because the Tax Policy Center did not know what Romney would actually eliminate, they took the trouble to construct a wide variety of models in an effort to see what results would emerge under different scenarios involving the many possible loopholes a Romney administration could choose to close and deductions that could disappear.
The bad news for Governor Romney is that—no matter how the Tax Policy Center structured the effort to balance the result of the proposed tax cuts, even going so far as to run the model under the assumption that Romney would first eliminate those deductions and loopholes that currently inure to the benefit of the wealthiest Americans—the result always turned out the same way.
The wealthy win big—middle and lower income earners…not so much.
This from the report: Even when we assume that tax breaks – like the charitable deduction, mortgage interest deduction, and the exclusion for health insurance – are completely eliminated for higher-income households first, and only then reduced as necessary for other households to achieve overall revenue-neutrality- the net effect of the plan would be a tax cut for high-income households coupled with a tax increase for middle-income households.
