When Mitt Romney unveiled his revised tax and debt plan last week, his camp sold it as a bid to preserve fairness to the middle class.
He proposed an across the board 20 per cent cut to everybody’s current rates, and to make up the lost revenue by limiting deductions, credits and other tax benefits for wealthy Americans. But he declined to specify exactly how he’d broaden the tax base. And a new analysis by the Tax Policy centre shows that without those details, his proposed cuts would actually be more regressive than his first plan.
Compared to the original proposal, the new one — or at least the pieces of it Romney’s specified — would actually lower taxes further on the wealthy, while slightly raising them on the poor. If Romney does ultimately specify which popular tax benefits he plans to eliminate, it’ll have to be a long list. According to TPC, “in the absence of such base broadening…the Romney plan would lower federal tax liability by about $900 billion in calendar year 2015 compared with current law, roughly a 24 per cent cut in total projected revenue. Relative to a current policy baseline, the reduction in liability would be about $480 billion in calendar year 2015.”
Here it is in chart form:
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