Romney tax plan would force $2,000 tax hike on families with children > Education Votes

4 Aug

Mitt Romney’s tax proposal would force a $2,000 tax hike on average middle-class families with children, while the wealthiest 5 percent of Americans — including Romney — would get a tax cut of $87,000. That’s the conclusion of an independent analysis released today.

According to the study by Brookings Institution and the Tax Policy Center, Romney’s plan “necessitates a shift in the tax burden of at least $86 billion away from high-income taxpayers [incomes of $1 million or more] onto lower- and middle-income taxpayers.”

The assessment goes to some lengths to make favorable assumptions about the features of Romney’s plan, including factoring in higher economic growth than at present. Even so, the “unprecedented” loss of $360 billion in the Republican presidential candidate’s revenue-neutral tax plan would require “deep reductions” in many tax benefits for low- and middle-income families and children.

Any plan that would significantly lower taxes on the wealthiest Americans from their already near record low levels while at the same time raising taxes on middle-income, working-class households is simply an insult to most Americans. Even most of the wealthiest Americans recognize the value they receive from living in a fair and prosperous society and are willing to contribute to its support. The tax structure envisioned in the plan Governor Romney has laid out would entail drastic cuts in the social safety net programs that keep millions of households from falling into dire poverty, said Richard Simms, chief economist at the National Education Association.

“It is not mathematically possible,” concludes the study, “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 . . .”

Other Brookings and Tax Policy Center study findings:

  • Romney’s tax proposal  would cost 95 percent of taxpayers an average of $500 per year.
  • Taxpayers who make less than $200,000 and who have with children would pay, on average, $2,000 more in taxes.
  • Even if the $360 billion in lost tax revenue is paid for through higher economic growth, as the Romney rationale maintains but leading economists and researchers say is unlikely, lower- and middle-income taxpayers would still need to pay higher taxes.
  • Because it is not “technically and practically feasible to design the tax expenditure cuts to occur ‘starting at the top’,” any revenue-neutral plan will generate larger tax cuts for high-income households and larger net tax increases for low- and middle-income households.

President Barack Obama’s tax plan, by contrast:

  • Calls on Congress to immediately prevent a tax hike on the 98 percent of Americans who make less than $250,000. A typical family of four would otherwise see their taxes go up by $2,200 a year.
  • Cuts the deficit by more than $4 trillion through spending cuts and reforms and ensuring everyone pays their fair share, while still making investments that strengthen the middle class and grow our economy.

Since coming to office, President Obama has cut taxes for a typical family by $3,600.

via Education Votes.

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