The critics' claims are based on calculations by the Tax Policy Center (a project of the Brookings Institution and the Urban Institute), which used a computer model to forecast personal tax revenue and Alternative Minimum Tax liabilities of taxpayers at each income level in 2015. Such forecasts are inevitably speculative.

To avoid the resulting uncertainties, I decided to analyze the Romney plan using the most recent IRS data, which is based on tax returns for 2009 and published in the current issue of the IRS quarterly publication. (Although 2009 was a low-income year because of the recession, using that year is preferable to looking back to some earlier period.)

Consider first the cost of the 20% reduction in all tax rates. The income-tax revenue in 2009 before all tax credits was $953 billion. Of this, $49 billion was from taxing dividends and capital gains at reduced rates that would not be subject to further reductions. So the 20% reduction applies to $904 billion and would produce what Washington tax analysts call a "static" revenue loss—that is, the revenue loss if the lower rates didn't cause taxpayers to change their behavior—of $181 billion.

But past experience shows that taxpayers do respond to lower marginal tax rates by acting in ways that increase their taxable incomes: increasing work effort, receiving more of their compensation in the form of taxable cash rather than untaxed fringe benefits, and spending less of their income on tax-favored forms of consumption that are deducted or excluded in calculating taxable income. More specifically, history shows that a tax cut that raises the after-tax share of earnings that an individual keeps by 10% raises taxable income by about 5%. This implies that the revenue loss from the 20% tax cut would be $148 billion, not $181 billion.