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OMB revenue estimate SupportiveArgument1 #231563 Dubay relies on a revenue estimate taken from the OMB Analytical Perspectives document on the FY2013 Budget. A table on page 261 a figure of $23.86 billion for 2013 from moving to a step-up basis.

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Visualizing the Romney Tax Debate »Visualizing the Romney Tax DebateVisualizing the Romney Tax Debate☜Tax reform has emerged as a major bone of contention in the 2012 Presidential election campaign. While President Obama has identified some tax changes, Governor Romney proposes major systemic reform. But is his plan - especially the proposals for individual taxation - viable?☜F1CEB7

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Romney's plan stated »Romney's plan statedRomney's plan stated☜For individual taxation, Romney proposes rate cuts for all taxpayers to be funded by reducing or eliminating various tax preferences. His plan aims to do this without raising the tax burden on low and middle income taxpayers, defined as $200,000 or less. It also abolishes several other taxes.☜59C6EF

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But does it compute? »But does it compute?But does it compute?☜In early August the Tax Policy Center produced an analysis showing that achieving all the goals of the Romney plan is mathematically impossible. Romney cited six studies in reply. Economists, journalists, bloggers and others then joined in on both sides. So is the plan mathematically possible?☜FFB597

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No - it does not compute »No - it does not computeNo - 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.☜59C6EF

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The TPC case »The TPC caseThe TPC case☜The essence of the Tax Policy Centers argument is contained in the excerpt from their paper cited below. We have parsed the argument into a set of premises that must be true for the argument to hold and mapped the debate about each.☜98CE71

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Available savings claim »Available savings claimAvailable savings claim☜The TPC set out a number of assumptions concerning the amount that could be raised by eliminating tax expenditures that benefit high income earners in the individual tax system (the analysis does not include corporate tax). These are enumerated in the cited section.☜FF97FF

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The critics challenge »The critics challengeThe critics challenge☜Critics of the TPC analysis question the exclusion of two major tax preferences - the exclusion of interest on state and local bonds and the exclusion of inside-buildup on life insurance vehicles. According to the TPC eliminating these exclusions could raise $45 billion in tax revenue.☜EF597B

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Ruling out "step up" »Ruling out "step up"Ruling out "step up"☜The TPC analysis assumed that, in the wake of abolition of estate duties, there would be no adjustment of the current capital gains treatment that in assessing inherited assets, excludes gains made between purchase and death. However in this case moving to a carry over basis would make sense.☜98CE71

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OMB revenue estimateOMB revenue estimate☜Dubay relies on a revenue estimate taken from the OMB Analytical Perspectives document on the FY2013 Budget. A table on page 261 a figure of $23.86 billion for 2013 from moving to a step-up basis.☜98CE71

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Assumes acrrued gains taxed on death »Assumes acrrued gains taxed on deathAssumes acrrued gains taxed on death☜Barro says Dubay gets it wrong on the revenue gain from moving to a carry-over basis. This is because the OMB estimate that Dubay relies on presumes gains would be taxed on an accruals basis immediately upon death, as stated in a footnote (see citation).☜EF597B

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Link[1] Analytical Perspectives - Budget of the U.S. Government (FY2013)

Author: Office of Management and Budget
Publication info: 2012
Cited by: Peter Baldwin 11:45 PM 19 October 2012 GMT
Citerank: (1) 231564Assumes acrrued gains taxed on deathBarro says Dubay gets it wrong on the revenue gain from moving to a carry-over basis. This is because the OMB estimate that Dubay relies on presumes gains would be taxed on an accruals basis immediately upon death, as stated in a footnote (see citation).13EF597B
URL:

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/spec.pdf?page=261

Excerpt / Summary

Table on page 261 contains the following entry:

Step-up basis of capital gains tax -
2013....... ..............................23,860 ($millions)
2013-17...............................182,210 ($millions)

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Entered by:- Peter Baldwin
NodeID: #231563
Node type: SupportiveArgument
Entry date (GMT): 10/19/2012 11:43:00 PM
Last edit date (GMT): 10/19/2012 11:49:00 PM
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