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Middle Class Families Could See Big Increases Under Romney’s Modified Tax Proposal By Travis Waldron posted from ThinkProgress Economy on Oct 5, 2012 at 1:36 pm
Republican presidential candidate Mitt Romney, facing criticism over how he would keep his tax plan from adding to the deficit or raising taxes on the middle class, this week proposed a new feature: he would cap the amount of tax deductions that could be claimed at $17,000. But that idea still doesn’t make the math work for Romney’s plan, according to Tax Policy Center economist William Gale, who worked on the original TPC report that showed Romney’s plan couldn’t possibly achieve all of his outlined goals.
And even as Romney’s new feature won’t “come close” to paying for his plan, it could also lead to additional tax increases on families who wrote off more than Romney’s cap, unless it exempts common deductions for the middle class (like health care and home mortgage interest), Bloomberg reports:
That won’t bring in enough revenue to make up for almost $5 trillion the government will lose over 10 years once tax rates are reduced by 20 percent as Romney has proposed, according to economist William Gale of the Brookings Institution in Washington.
“It doesn’t come close to paying for the $5 trillion,” said Gale, who co-authored a study of Romney’s tax plan for the non-partisan Tax Policy Center in Washington.
At least 3.7 million U.S. taxpayers last year reported deductions of $25,000 or more. About 10 million others wrote off $15,000 to $25,000. Romney says their taxes wouldn’t go up, and in fact would decline, under his 20 percent across-the-board tax rate cut.
Romney has made several promises about his plan: it won’t add to the deficit, it won’t reduce the share of taxes paid by the rich, and it won’t raise taxes on the middle class. The original Tax Policy Center report found that Romney couldn’t possibly keep all three of those promises if he cut rates by 20 percent across the board, as he says he will.
In the abstract, capping deductions is not necessarily a bad idea, and could cut taxes for some middle class families. But for others, it could lead to a higher tax bill. Deductions popular with both parties, like the home mortgage interest deduction and the deduction for health care costs, could also be limited by Romney’s plan, eating up large chunks of the amount middle class families are able to write off each year.
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-------------------- Wise men learn more from fools than fools from the wise.
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Obama's $4 Trillion Lie Exposed by His Own Budget
Accuracy: At one point in Wednesday night's debate President Obama boasted about his "balanced" plan to cut the projected 10-year deficit by $4 trillion. One problem: His own budget exposes this claim as flat-out false.
Even fact checkers at reliably Obama-friendly mainstream media outlets jumped on Obama's claim. ABC's John Karl called it "mostly fiction." He noted, for example, that Obama counts the $1 trillion budget cut deal he already signed with Republicans as part of his plan. And, he said, Obama counts $800 billion saved from winding down the wars in Afghanistan and Iraq, savings that were going to occur anyway. An AP fact check pointed to the same flaws while noting that Obama also "uses creative bookkeeping to hide spending on Medicare reimbursements to doctors."
The Washington Post's in-house fact checker called it "Obama's faux deficit plan" and the war spending trick was a "major budget gimmick." And Politifact.com, the fact-checking site run by the Tampa Bay Times, could only muster a "half true" rating for Obama's claim.
It pointed to an analysis of Obama's plan by the bipartisan Committee for a Responsible Federal Budget, which found just $2.4 trillion in deficit cuts, and another by the liberal Center on Budget and Policy Priorities, which found only $2.1 trillion.
But you don't need to consult a bunch of fact checkers or outside budget experts to verify Obama's claim. As he said in the debate, his "specific $4 trillion deficit reduction plan" is "on a website. You can look at all the numbers, what cuts we make and what revenue we raise." Subscribe to the IBD Editorials Podcast So we took Obama up on his challenge and went to that website to locate his budget plan. You can find it here.
And sure enough, there on page 206, is a table showing what the total 10-year deficit would be if the government were left on auto-pilot — the "adjusted baseline" — and what it would be under Obama's budget plan.
But what that table shows, clear as day, is that Obama's plan would trim just $1.98 trillion from the projected 10-year, $8.7 trillion deficit. Even for government work, that's a far cry from $4 trillion.
Then there's Obama's claim that for every $2.50 in spending cuts "we ask for $1 of additional revenue." But the very next pages, Obama's budget shows he'd cut spending a mere $94 billion over the next decade, while raising taxes by $1.9 trillion. In other words, for every $1 in spending cuts, Obama would raise taxes by $20. Maybe that's why, when the House and Senate brought Obama's alleged $4 trillion, balanced plan up for a vote earlier this year, not one member of either party approved it. As Obama said in the debate: "It's — it's math. It's arithmetic."
Close up of Mitt Romney cheating during the debate on October 3rd 2012. "No props, notes, charts, diagrams, or other writings or other tangible things may be brought into the debate by any candidate."
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