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Thread: Study: Romney tax plan would result in cuts for rich, higher burden for others

  1. #1

    Study: Romney tax plan would result in cuts for rich, higher burden for others

    By Lori Montgomery,
    1The Washington Post

    Mitt Romney’s plan to overhaul the tax code would produce cuts for the richest 5 percent of Americans — and bigger bills for everybody else, according to an independent analysis set for release Wednesday.

    The study was conducted by researchers at the nonpartisan Tax Policy Center, a joint project of the Brookings Institution and the Urban Institute, who seem to bend over backward to be fair to the Republican presidential candidate. To cover the cost of his plan — which would reduce tax rates by 20 percent, repeal the estate tax and eliminate taxes on investment income for middle-class taxpayers — the researchers assume that Romney would go after breaks for the richest taxpayers first.


    They even look at what would happen if Republicans’ dreams for tax reform came true and the proposal generated significant revenue through economic growth.

    None of it helped Romney. His rate-cutting plan for individuals would reduce tax collections by about $360 billion in 2015, the study says. To avoid increasing deficits — as Romney has pledged — the plan would have to generate an equivalent amount of revenue by slashing tax breaks for mortgage interest, employer-provided health care, education, medical expenses, state and local taxes, and child care — all breaks that benefit the middle class.

    “It is not mathematically possible to design a revenue-neutral plan that preserves current incentives for savings and investment and that does not result in a net tax cut for high-income taxpayers and a net tax increase for lower- and/or middle-income taxpayers,” the study concludes.

    Even if tax breaks “are eliminated in a way designed to make the resulting tax system as progressive as possible, there would still be a shift in the tax burden of roughly $86 billion [a year] from those making over $200,000 to those making less” than that.

    What would that mean for the average tax bill? Millionaires would get an $87,000 tax cut, the study says. But for 95 percent of the population, taxes would go up by about 1.2 percent, an average of $500 a year.

    The Romney campaign on Wednesday declined to address the specifics of the analysis, dismissing it as a “liberal study.” Campaign officials noted that one of the three authors, Adam Looney of Brookings, served as a senior economist on the Obama Council of Economic Advisers. The other two authors are Samuel Brown and William Gale, both of whom are affiliated with Brookings and the Tax Policy Center.

    “President Obama continues to tout liberal studies calling for more tax hikes and more government spending. We’ve been down that road before – and it’s led us to 41 straight months of unemployment above 8 percent,” said Romney campaign spokesman Ryan Williams. “It’s clear that the only plan President Obama has is more of the same. Mitt Romney believes that lower tax rates and less government will jump-start the economy and create jobs.”

    This story has been updated.

    http://www.washingtonpost.com/busine...COX_story.html

  2. #2
    Quote Originally Posted by YellowSubmarine View Post
    By Lori Montgomery,
    1The Washington Post

    Mitt Romney’s plan to overhaul the tax code would produce cuts for the richest 5 percent of Americans — and bigger bills for everybody else, according to an independent analysis set for release Wednesday.

    The study was conducted by researchers at the nonpartisan Tax Policy Center, a joint project of the Brookings Institution and the Urban Institute, who seem to bend over backward to be fair to the Republican presidential candidate. To cover the cost of his plan — which would reduce tax rates by 20 percent, repeal the estate tax and eliminate taxes on investment income for middle-class taxpayers — the researchers assume that Romney would go after breaks for the richest taxpayers first.


    They even look at what would happen if Republicans’ dreams for tax reform came true and the proposal generated significant revenue through economic growth.

    None of it helped Romney. His rate-cutting plan for individuals would reduce tax collections by about $360 billion in 2015, the study says. To avoid increasing deficits — as Romney has pledged — the plan would have to generate an equivalent amount of revenue by slashing tax breaks for mortgage interest, employer-provided health care, education, medical expenses, state and local taxes, and child care — all breaks that benefit the middle class.

    “It is not mathematically possible to design a revenue-neutral plan that preserves current incentives for savings and investment and that does not result in a net tax cut for high-income taxpayers and a net tax increase for lower- and/or middle-income taxpayers,” the study concludes.

    Even if tax breaks “are eliminated in a way designed to make the resulting tax system as progressive as possible, there would still be a shift in the tax burden of roughly $86 billion [a year] from those making over $200,000 to those making less” than that.

    What would that mean for the average tax bill? Millionaires would get an $87,000 tax cut, the study says. But for 95 percent of the population, taxes would go up by about 1.2 percent, an average of $500 a year.

    The Romney campaign on Wednesday declined to address the specifics of the analysis, dismissing it as a “liberal study.” Campaign officials noted that one of the three authors, Adam Looney of Brookings, served as a senior economist on the Obama Council of Economic Advisers. The other two authors are Samuel Brown and William Gale, both of whom are affiliated with Brookings and the Tax Policy Center.

    “President Obama continues to tout liberal studies calling for more tax hikes and more government spending. We’ve been down that road before – and it’s led us to 41 straight months of unemployment above 8 percent,” said Romney campaign spokesman Ryan Williams. “It’s clear that the only plan President Obama has is more of the same. Mitt Romney believes that lower tax rates and less government will jump-start the economy and create jobs.”

    This story has been updated.

    http://www.washingtonpost.com/busine...COX_story.html
    Dude...50 percent of Americans pay NO TAX. Any tax decrease will only affect the wealthy.

    Tax SHOULD be increased on the bottom 50 percent. EVERYONE should pay something.

    Soldiers are getting killed so people can pay nothing? Really?

    BTW...I am not asking for a tax cut and I pay a LOT.

  3. #3
    Liberals want everyone else to pay taxes, so they can ride the gravy train.

  4. #4
    Quote Originally Posted by southparkcpa View Post
    Dude...50 percent of Americans pay NO TAX. Any tax decrease will only affect the wealthy.

    Tax SHOULD be increased on the bottom 50 percent. EVERYONE should pay something.

    Soldiers are getting killed so people can pay nothing? Really?

    BTW...I am not asking for a tax cut and I pay a LOT.



    Awhile ago you advocated that EVERYBODY should pay something. I totally agree. Some % of their gross. Maybe 5%. That should be a starting point on every tax return - a minimum, then we go from there.
    I frankly do not think there should be a tax cut for any bracket. Close some loopholes. Tax some "hidden" benefits.
    Most of all reduce spending. If taxes are incfreased the money will just be spent by whoever is in power.

  5. #5
    Quote Originally Posted by palmetto defender View Post
    Awhile ago you advocated that EVERYBODY should pay something. I totally agree. Some % of their gross. Maybe 5%. That should be a starting point on every tax return - a minimum, then we go from there.
    I frankly do not think there should be a tax cut for any bracket. Close some loopholes. Tax some "hidden" benefits.
    Most of all reduce spending. If taxes are incfreased the money will just be spent by whoever is in power.
    yeah..guys like Yellow need to understand that we could DOUBLE rates and that wouldn't balance the budget.

    People costs are killing the budget. We are overstaffed in basically every area, paying costs like banked sick time up to a year, pensions for people in theiur 40's and 50's, life time health insurance. These benefits are NOT available anywhere because they bankrupt the company. Yet..here we are.

    We spend almost 2X what we collect every year. Thats like a household making 5K and spending 9K.

  6. #6
    Quote Originally Posted by southparkcpa View Post
    Dude...50 percent of Americans pay NO TAX. Any tax decrease will only affect the wealthy.

    Tax SHOULD be increased on the bottom 50 percent. EVERYONE should pay something.

    Soldiers are getting killed so people can pay nothing? Really?

    BTW...I am not asking for a tax cut and I pay a LOT.
    Gee. So articulate. So well thought out.

  7. #7
    the U.S. government has promised its citizens almost four times the entire net worth of the nation. If the government confiscated everyone's net worth, people would be left penniless, and the government would still be unable to fund these promises.

    At the risk of confusing readers, the annual government deficit using Generally Accepted Accounting Principles (GAAP) is $11 trillion per year, not the $1.3 trillion that will be reported. Kotlikoff's calculations of the unfunded liabilities may be high. Other estimates are lower, but not enough to alter the conclusion that the U.S. is hopelessly broke. Gary North comments on lower estimates:

    Even if Kotlikoff is wrong by a hundred trillion dollars, it becomes clear that Congress is completely incapable of dealing politically with this problem. It could not possibly raise the funds to balance the budget if the budget really is increasing by, say, $5 trillion per year [GAAP calculation].



    Read more: http://www.americanthinker.com/2012/...#ixzz246A2tCcP

    What part of " even if the government confiscated everyone's net worth, people would be left penniless, and the government would still be unable to fund these promises" don't moonbats get?

  8. #8
    Neither party has the balls to get rid of all deductions and have a simpler code with lower rates that stops pandering to their constituents.

    The Republicans, like the Democrats are simply pandering to their constituents when it comes to tax reform. Neither party has the leadership or will to actually tackle all the special interest deductions that have made our tax code a hot mess.

  9. #9
    Quote Originally Posted by Winstonbiggs View Post
    Neither party has the balls to get rid of all deductions and have a simpler code with lower rates that stops pandering to their constituents.

    The Republicans, like the Democrats are simply pandering to their constituents when it comes to tax reform. Neither party has the leadership or will to actually tackle all the special interest deductions that have made our tax code a hot mess.
    This.

  10. #10
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    Oh good, YellowSubmarine is back. It must be an election year.

  11. #11
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    Quote Originally Posted by Winstonbiggs View Post
    Neither party has the balls to get rid of all deductions and have a simpler code with lower rates that stops pandering to their constituents.

    The Republicans, like the Democrats are simply pandering to their constituents when it comes to tax reform. Neither party has the leadership or will to actually tackle all the special interest deductions that have made our tax code a hot mess.
    + 5 trillion

  12. #12
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    The GOP proposing to lower tax rates for business and individuals, eliminating the estate tax and the AMT is a good start.

    If only the "(D) = (R)" flat earthers, I mean flat taxers could tell me how their plan would work out better for me after I lose all my medical, state tax, child credit, real estate tax, mortgage interest and business related deductions I'd be all ears
    Last edited by Jungle Shift Jet; 08-20-2012 at 11:38 AM.

  13. #13
    Quote Originally Posted by YellowSubmarine View Post
    Gee. So articulate. So well thought out.
    Where's your idea tough guy?

  14. #14
    Quote Originally Posted by Jungle Shift Jet View Post
    The GOP proposing to lower tax rates for business and individuals, eliminating the estate tax and the AMT is a good start.

    If only the "(D) = (R)" flat earthers, I mean flat taxers could tell me how their plan would work out better for me after I lose all my medical, state tax, child credit, real estate tax, mortgage interest and business related deductions I'd be all ears
    At some point, "how will this work better for me" (in the short term) has to stop being the litmus test. I'd say that a good time to invoke that rule is when the system is heading for bankruptcy . . . as it is now.

  15. #15
    Quote Originally Posted by doggin94it View Post
    At some point, "how will this work better for me" (in the short term) has to stop being the litmus test. I'd say that a good time to invoke that rule is when the system is heading for bankruptcy . . . as it is now.

    Agree here. The ME concept just like the NIMBY concept has to be minimized.
    Sacrifice has to be made by ALL. And that means people NOT paying taxes. Everybody who earns has to pay something Period.
    Things need to be moved gradually so as to lessen shock. Tweaked if you will.
    Fewer dedcutions and exemptions. Slight increases in cap gains and dividend taxes. Keep the brackets as they are.
    The health care deduction is already in place to be 10% in 2016 - good move. Things like health benefits above a certain level need to be taxed. So do company life insurance and company cars, company loans and stock options. Country club memberships and ALL percs.
    And spending needs to be cut - now. Everywhere. Food stamps, medicaid, student loans through the gov (have dad get a mortgage), military, gov employees and their salaries/benefits. If a company can do it, the gov can.

  16. #16
    Quote Originally Posted by southparkcpa View Post
    Dude...50 percent of Americans pay NO TAX. Any tax decrease will only affect the wealthy.

    Tax SHOULD be increased on the bottom 50 percent. EVERYONE should pay something.

    Soldiers are getting killed so people can pay nothing? Really?

    BTW...I am not asking for a tax cut and I pay a LOT.
    Quote Originally Posted by YellowSubmarine View Post
    Gee. So articulate. So well thought out.
    let's see . . .

    He stated FACTS (many people don't pay taxes at all), SUGGESTIONS ("everyone should pay something"), and CONCESSIONS ("I pay a lot but am not asking for any back")

    Apparently you have a different definition of "articulate,well-thought out responses" than the rest of us . . .

  17. #17
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    Quote Originally Posted by doggin94it View Post
    At some point, "how will this work better for me" (in the short term) has to stop being the litmus test. I'd say that a good time to invoke that rule is when the system is heading for bankruptcy . . . as it is now.
    I pay plenty of tax. I pay property tax, Federal Tax, State Tax to NJ, State Tx to NY, all manner of Taxes disguised as fees, Tolls, Gas Tax
    so on and so forth.

    Having 2 business degrees, allow me not to be so on board with the Flat Tax / VAT Tax fetishes the unknowledgable seem so fixated on.

    Given that so many are positing tax schemes here, allow me to propose some of my own - a FLOOR or Minimum Tax everyoneshould pay, an INCLUSION amount so to speak. 5 to 10% seems right, perhaps on a progressive scale. An MT, not an AMT. Next prevent folks who pay 0 from getting any "Refund" especially Illegal Alien parasites.

    Then, work towards eliminating tax fraud by assembling / analyzing any and all data available on folks including biometrics. If that pisses on the Libertarian mindset too bad. I'm tired of people breaking secular and Biblical laws and gliding along on the sweat of my brow.

    You and Warren Buffett can always pay extry. Department of The US Treasury. http://www.fms.treas.gov/faq/moretopics_gifts.html
    Last edited by Jungle Shift Jet; 08-20-2012 at 12:37 PM.

  18. #18
    Quote Originally Posted by Jungle Shift Jet View Post
    I pay plenty of tax. I pay property tax, Federal Tax, State Tax to NJ, State Tx to NY, all manner of Taxes disguised as fees, Tolls, Gas Tax
    so on and so forth.

    Having 2 business degrees, allow me not to be so on board with the Flat Tax / VAT Tax fetishes the unknowledgable seem so fixated on.

    Given that so many are positing tax schemes here, allow me to propose some of my own - a FLOOR or Minimum Tax everyoneshould pay, an INCLUSION amount so to speak. Next prevent folks who pay 0 from getting any "Refund" especially Illegal Alien parasites.

    Then, work towards eliminating tax fraud by assembling / analyzing any and all data available on folks including biometrics. If that pisses on the Libertarian mindset too bad. I'm tired of people breaking secular and Biblical laws and gliding along on the sweat of my brow.

    You and Warren Buffett can always pay extry. Department of The US Treasury. http://www.fms.treas.gov/faq/moretopics_gifts.html

    I'm in agreement with most of what you say. I am also not adverse to a small increase in div/cap gains. From 15% to say 17%?
    The lower brackets pay Zero% on divs./cap gains. And since that is almost my only source of income, I would be paying more. I am not a masochist but everybody has to participaate.

  19. #19
    Quote Originally Posted by YellowSubmarine View Post
    By Lori Montgomery,
    1The Washington Post

    Mitt Romney’s plan to overhaul the tax code would produce cuts for the richest 5 percent of Americans — and bigger bills for everybody else, according to an independent analysis set for release Wednesday.

    The study was conducted by researchers at the nonpartisan Tax Policy Center, a joint project of the Brookings Institution and the Urban Institute, who seem to bend over backward to be fair to the Republican presidential candidate. To cover the cost of his plan — which would reduce tax rates by 20 percent, repeal the estate tax and eliminate taxes on investment income for middle-class taxpayers — the researchers assume that Romney would go after breaks for the richest taxpayers first.


    They even look at what would happen if Republicans’ dreams for tax reform came true and the proposal generated significant revenue through economic growth.

    None of it helped Romney. His rate-cutting plan for individuals would reduce tax collections by about $360 billion in 2015, the study says. To avoid increasing deficits — as Romney has pledged — the plan would have to generate an equivalent amount of revenue by slashing tax breaks for mortgage interest, employer-provided health care, education, medical expenses, state and local taxes, and child care — all breaks that benefit the middle class.

    “It is not mathematically possible to design a revenue-neutral plan that preserves current incentives for savings and investment and that does not result in a net tax cut for high-income taxpayers and a net tax increase for lower- and/or middle-income taxpayers,” the study concludes.

    Even if tax breaks “are eliminated in a way designed to make the resulting tax system as progressive as possible, there would still be a shift in the tax burden of roughly $86 billion [a year] from those making over $200,000 to those making less” than that.

    What would that mean for the average tax bill? Millionaires would get an $87,000 tax cut, the study says. But for 95 percent of the population, taxes would go up by about 1.2 percent, an average of $500 a year.

    The Romney campaign on Wednesday declined to address the specifics of the analysis, dismissing it as a “liberal study.” Campaign officials noted that one of the three authors, Adam Looney of Brookings, served as a senior economist on the Obama Council of Economic Advisers. The other two authors are Samuel Brown and William Gale, both of whom are affiliated with Brookings and the Tax Policy Center.

    “President Obama continues to tout liberal studies calling for more tax hikes and more government spending. We’ve been down that road before – and it’s led us to 41 straight months of unemployment above 8 percent,” said Romney campaign spokesman Ryan Williams. “It’s clear that the only plan President Obama has is more of the same. Mitt Romney believes that lower tax rates and less government will jump-start the economy and create jobs.”

    This story has been updated.

    http://www.washingtonpost.com/busine...COX_story.html
    This story glosses over the fact that Romney has called for revenue neutral tax cuts. It states that it is not mathematically possible "while preserving incentives for savings". There are alot of liberties taken there. Romney has promised Revenue Neutral cuts. He has stated that the various income brackets at the top will still pay the same percentage of collections - 70% for the top 10% - that they do now. The tax part of the Romney plan is designed to flatten and simplify the code not to significantly reduce the dollars that individuals pay.

    Meanwhile Romney's medicare plan preserves medicare for seniors and fixes it for future generations. Obama's plan ruins Medicare.

  20. #20
    Quote Originally Posted by doggin94it View Post
    At some point, "how will this work better for me" (in the short term) has to stop being the litmus test. I'd say that a good time to invoke that rule is when the system is heading for bankruptcy . . . as it is now.
    At some point? If you have no faith in the institutions of government because the same people who promise fairness are hiding what they are doing and taking care of their own in the darkness of night why shouldn't we look out for ourselves?

    Shared sacrifice can only happen if we have trust in both our institutions and the people who are running our institutions.

    Until we get real government reform and transparency not putting Chris Dodd's and Barney Fwanks name on financial reform or having a 2300 page health care bill that's a complete give away to union workers at the expense of doctors and patients, why shouldn't we have a litmus test that protects our own interest.

    One thing Obama and Ryan absolutely agreed to gut was Simpson/Bowles. The question is why?

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