Back in March, when Mitt Romney had all but secured the Republican nomination, The Washington Post’s Ezra Klein compared the tax plans of Romney and President Barack Obama with one chart. He used data from the Tax Policy centre, the same think tank that is out with a more comprehensive analysis of Romney’s tax plan today.
Photo: Washington Post/Ezra Klein
Klein’s chart measures the per cent change in effective tax rates in different percentile groups of earners. The clear difference here is that Obama’s plan hikes taxes on the top 5 per cent — especially the top 0.1 and 1 per cent — of earners, leaving the other 95 per cent virtually unchanged. Romney’s plan cut taxes on the top 5 per cent by at least 6 per cent.
Forbes’ Naomi Robbins modified Klein’s chart a couple weeks ago to better explain its proportional affect on taxpayers. The chart has “equally spaced intervals on the horizontal axis” that represent “equal percentages of taxpayers.”
Photo: Forbes/Naomi Robbins
Finally, here’s the chart from the Brookings Institute/Tax Policy centre’s report today, which breaks down the effect on the tax rates after the more comprehensive analysis of Romney’s plan to implement a 20 per cent across-the-board cut in marginal tax rates.
This chart measures the per cent change in after-tax income. It shows a steeper increase than originally predicted on the 95 per cent. Those making more than $200,000 — or the top 5 per cent of earners — would proportionally benefit from Romney’s tax plan. Meanwhile, those making less than $200,000 would see after-tax income slashed by about 1.2 per cent.
Photo: Brookings Institute/Tax Policy centre
“It is not mathematically possible 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,” the authors of the Brookings/TPC study write in their conclusion.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.