Home > Politics > On Taxes. I’m So Sick of Writing About Mitt Romney’s Tax Plan

On Taxes. I’m So Sick of Writing About Mitt Romney’s Tax Plan

I think I’ve finally made sense out of the rhetoric about Governor Romney’s tax plan; of the independent reports and of the “6 reports” that disputed the first report. I think I know what’s going on. It was hidden in Romney’s answers tonight, of all places. Listening to President Obama and Romney discuss Romney’s tax proposals reminded me of the old Highlights Magazines in doctors’ office waiting rooms. There are two pictures side by side, and you have to pick out the differences. They’re subtle, but they’re there. Did you hear it? Were you listening?

Here it is. Obama talks about the tax rates for the top 2% (generally couples above $250,000; individuals above $200,000). If you cut those tax rates by 20%, as Romney proposes, then there don’t appear to be enough deductions to eliminate to make up for the lost revenue just from that bracket.

However, Romney talked about the top 5%, and maintaining the same share of the tax burden as they currently pay (about 60% of income taxes). Now, first of all, maintaining the same share of the tax burden does not rule out a tax cut if everyone else is also getting a tax cut. But that aside, the 5% versus the 2% is how they make the numbers work. If the top 5% are getting deductions eliminated, then revenue neutrality can be achieved even if the top 2% are getting a cut, paid for by reduced deductions for the 95th-97th percentiles (the next 3%).

I don’t know the general income numbers for those percentiles, but I have a hunch that it lines up fairly well with Martin Feldstein’s defense of Romney’s plan which called for eliminating deductions for all those making over $100,000 a year. And thus, if you make between $100,000 and $200,000 as an individual or the equivalent tax bracket as a couple, Mitt Romney’s tax plan is likely to hurt you. And that’s what we learned in tonight’s debate. Obama’s plan hurts the top 2%. Romney’s plan will probably help the top 2% on the backs of the next 3%. And hopefully, I’ll never write about Mitt Romney’s tax plan again.

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