Mitt Romney’s Tax Plan Is Still a Mathematical Failure
April 17, 2012 by Suzie-Q
Apr 16 2012, 6:42 PM ET
The last time we checked in on Mitt Romney’s tax plan, the numbers didn’t add up
. Actually, there weren’t any numbers to
add up. Instead, there was a not very plausible promise to make the numbers add up at a later date. At stake was that Romney only spelled out the taxes and not the tax deductions that he wanted to cut. Basically, he told us what was for dessert, but not for dinner. Because he promised that his plan would be “revenue neutral,” these numbers had to offset each other. But if Romney’s recent hot mic moment
is any indication, they don’t. Not even close.
Let’s start with a quick four-step recap of Romney’s tax plan. First, he extends all of the Bush tax cuts. Second, he cuts income tax rates an additional 20 percent. Third, he undoes the tax hikes and credits from Obamacare and the stimulus. Finally, he eliminates the capital gains tax for all but the richest households. The first three parts of this plan shower high-earners with most of the money. The last part is a bit of a fig leaf for the rest of us. After all, the top 0.1% of households earn half of all capital gains
. Exempting middle-class households from this tax certainly helps them, but there’s just not that much money there.
There are two important numbers to keep in mind when it comes to Romney’s tax plan: $480 billion and $900 billion. The former is how much the nonpartisan Tax Policy Center
reckons his plan would add to the deficit in 2015 alone in a world where the Bush tax cuts continue; the latter is the same for a world where the Bush tax cuts expire. Since Romney has pledged that his plan will be revenue neutral over the current baseline — that is, with the Bush tax cuts — that leaves him with a $480 billion hole to fill by closing loopholes or cutting spending.
Which brings us back to Romney’s recent run-in with a hot mic. During a more candid moment at a fundraising event, reporters overheard Romney lay out at least two loopholes he would consider closing: the mortgage interest deduction on second homes for high-earners and state income and property tax deductions. Let’s consider these in turn.