No - it does not compute

The Tax Policy Center argues in its analysis that the various elements of the Romney plan cannot all be achieved. The TPC paper has been invoked and/or defended by almost all of the critics of the Romney plan in the debate.

The abstract of the Tax Policy Center's paper is cited below, along with a later article by William Gale, one of the TPC study authors.

The TPC summarizes its conclusions as to the effect of the Romney plan on taxpayers in different income ranges on page 5:

"Absent any base broadening, the proposed reductions in individual and estate taxes specified in Governor Romney’s plan would decrease federal tax revenues by $360 billion in 2015.7 These tax cuts predominantly favor upper-income taxpayers: Taxpayers with incomes over $1 million would see their after-tax income increased by 8.3 percent (an average tax cut of about $175,000), taxpayers with incomes between $75,000 and $100,000 would see somewhat smaller increases of about 2.4 percent (an average tax cut of $1,800), while the after-tax income of taxpayers earning less than $30,000 would actually decrease by about 0.9 percent (an average tax increase of about $130) due to the expiration of the temporary tax cuts enacted in 2009 and extended at the end of 2010.

In order to form a revenue neutral plan, the proposed revenue reductions from lower rates must be financed with an equal-value elimination or reduction in available tax preferences. (In our analysis, we assume that eliminating preferences that lower rates on savings and investment is off the table.) Offsetting the $360 billion in revenue losses necessitates a reduction of roughly 65 percent of available tax expenditures. Such a reduction by itself would be unprecedented, and would require deep reductions in many popular tax benefits ranging from the mortgage interest deduction, the exclusion for employer-provided health insurance, the deduction for charitable contributions, and benefits for low- and middle-income families and children like the EITC and child tax credit."
RELATED ARTICLESExplain
Visualizing the Romney Tax Debate
Romney's plan stated
But does it compute?
No - it does not compute
The TPC case
Yes - it does compute
Graph of this discussion
Enter the title of your article


Enter a short (max 500 characters) summation of your article
Enter the main body of your article
Lock
+Comments (0)
+Citations (2)
+About
Enter comment

Select article text to quote
welcome text

First name   Last name 

Email

Skip