We all know how concerned Romney and the Republicans are about the deficit.
Romney's new tax proposals add $3.4 trillion to deficit
By Bernie Becker - 02/29/12 07:14 PM ET
thehill.com
Mitt Romney’s new bolder tax plan also comes with a bigger price tag: More than $3 trillion, according to a new nonpartisan analysis.
Romney proposed slashing all individual tax rates by 20 percent and scrapping the alternative minimum tax last week, following charges from conservative commentators and his rivals for the GOP nomination that his original economic plan was milquetoast.
The Urban-Brookings Tax Policy Center said Wednesday that those two changes would tack an extra $3.4 trillion on to budget deficits over the next 10 years, compared to a world where the Bush-era tax rates were extended.
The tax cuts would add more to the deficit if those rates expired, as they are scheduled to do at year’s end.
The former Massachusetts governor has said that economic growth sparked by the tax cuts and the elimination of tax preferences would help ensure that his proposals don’t pile on more debt.
But, as Howard Gleckman of the Tax Policy Center noted, Romney has yet to specify which tax breaks he would like to see removed from the code. Gleckman also noted that his group’s analysis did not try to calculate how much economic growth would rise out of Romney’s plan.
“I suspect they would boost growth, but nobody has a credible way to measure by how much,” Gleckman wrote about the proposed tax cuts. “And despite the fervent wishes of tax cutters everywhere, there is simply no evidence that tax cuts ever generate enough growth to pay for themselves.” Romney added the two new tax proposals on top of the 59-point economic plan released last year, a framework that also called for reducing the top corporate tax rate to 25 percent and protecting offshore corporate profits from U.S. taxation.
The GOP presidential candidate also wants to get rid of all taxes on capital gains and dividends for those making under $200,000 a year, and permanently abolish the estate tax.
Under Romney’s new plan, the top individual rate, now 35 percent, would slide down to 28 percent – exactly where it was after President Reagan and Congress overhauled the tax code in 1986. Those in the lowest tax bracket would owe 8 percent, instead of the current 10 percent.
The Tax Policy Center did add some caveats to its new analysis, noting that it had not done a revenue estimate for the full Romney plan and looked at just the AMT and individual tax rate proposals.
Earlier this year, the center examined Romney’s original tax plan and found that it would add to deficits over a decade as well, though not as much as rivals like Newt Gingrich would.
The Tax Policy Center has also said that the tax plan from Rick Santorum, who finished twice to Romney in both the Michigan and Arizona primaries, would likely also add trillions of dollars to the deficit as well.
Like Romney, Santorum would reduce the top individual rate to 28 percent. But the former Pennsylvania senator would take the corporate rate down to 17.5 percent, and zero out the rate for manufacturers.
Some conservatives have not embraced Santorum’s plan either, expressing concern incentives for manufacturing would create further distortions in the tax code.
Santorum has also called for tripling the deduction for dependent children. |
