Citerank: (9) 231177Need for excess savingsTo avoid an impractical "sudden death" cutoff at some income level (say $200,000) tax preferences would need to have a phase in. This would add to the cost and require identifying high-income tax preferences worth more than needed to eliminate the TPC's claimed $86 billion shortfall.1198CE71, 231226Obamacare inclusionThe revenue baseline is inflated. The TPC included in its baseline Obamacare taxes which Romney has not pledged to offset. This point is conceded by some defenders of the TPC analysis such as Josh Barro (see citation).13EF597B, 231236Life insurance concessionsSome TPC defenders are prepared to concede this one could be back on the table.1198CE71, 231460A different planA tax proposal which deemed income above $100,000 high is a different proposition from the one Romney has actually advanced which aims to shield earners below the $200,000 threshold.13EF597B, 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, 231567Revenue baseline understatedAccording to one critic Rosen failed to include in his estimate of the revenue that would need to be generated from base-broadening allowance for Romney's proposals to repeal the Estate Tax and Alternative Minimum Tax.1198CE71, 231568Micro-behavioral offsetsOne of the authors of the TPC analysis argues that Rosen expects taxpayers to adjust their behavior to rate cuts, but fails to do so in a symmetrical fashion for reduced tax concessions. These would offset revenue gains from the former.1198CE71, 232174Micro-behavioral offsetsOne of the authors of the TPC analysis argues that Rosen expects taxpayers to adjust their behavior to rate cuts, but fails to do so in a symmetrical fashion for reduced tax concessions. These would offset revenue gains from the former.1198CE71, 233432Broadening effectsThe authors state they have not included in their model any estimation of the effects of base broadening - since these have not been specified by Romney. But this presumes they have no bearing on incentives. One of the TPC authors raised this in response to Rosen (see citation below)13EF597B

I think these objections are correct with regard to life insurance and Obamacare taxes, but mostly wrong with regard to municipal bond interest, which should be counted at just $5 billion. This is because the CBO estimates that only about 20 percent of the tax subsidy for municipal bond interest actually accrues to bondholders; the rest goes to state and local governments because bondholders will accept low interest rates on government debt in exchange for favorable tax treatment.

If the muni bond tax preference were eliminated, high income taxpayers would pay about $25 billion more in federal income taxes. But they would be relieved of roughly $20 billion in implicit taxes they pay to state and local governments in the form of reduced interest rates on municipal debt, for only $5 billion in actual added taxes.

Depending on your assumptions, it may be that the remaining $20 billion in muni bond subsidies effectively flows back to owners of capital generally, though not to municipal bondholders specifically, by inflating the yields on non-tax advantaged investments. If the muni bond tax exemption were repealed and replaced with nothing, this would broaden the tax base.

However, it is politically unthinkable that the muni bond subsidy would be repealed without something, such as tax credit bonds, taking its place and producing similar market-wide effects. Consequently, only 20 percent of the proceeds from eliminating the muni bond subsidy should be counted as actual base broadening on high earners. Or if the muni bond subsidy were somehow repealed without offset, a key effect would be state and local governments raising taxes (mostly not on the wealthy) to pay higher interest costs.

In total, this leaves Brill about $32 billion short of closing the deficit in the TPC report. Since he also needs about $15 billion to structure a phaseout and tens of billions more to allow Romney to offer a real menu of options to Congress, Brill is well short of "confirming the soundness" of the Romney tax plan.