When Mitt Romney introduced his tax plan he described it as necessary to get the economy moving. During a campaign stop in Ohio, Romney abandoned his original rationale when he warned taxpayers not to expect big tax cuts, because he was going to eliminate tax preferences to make his tax plan revenue neutral, or close to it. In other words, Romney was, in effect, taking away with one hand what he had given with the other.
Mitt Romney’s next foray into the realm of unreality came in the first presidential debate, when he vowed not to increase taxes on the wealthy — now commonly defined as those with taxable income of over $250,000 — as he said they are “doing very well.” Romney also blundered when he said that he would not support any tax cuts that increased the deficit. Also, when Romney said he did not have a $5 trillion tax plan, he was either disputing the $5 trillion figure, or actually denying the existence of any tax plan.
The non-partisan Tax Policy Center (TPC) has dissected the main features of the plan, meaning that the revenue loss will be even greater than TPC’s final figure, because there are additional tax cuts in the Romney plan. The revenue loss over 10 years is as follows:
1) Lowering each of the current six tax rates by 20 percent – $2.5 trillion.
2) Tax cut for corporations – $1.1 trillion.
3) Eliminating the alternative minimum tax (ATM) – $700 billion.
4) Repeal the high-income payroll tax – $250 billion.
5) Repeal the estate tax – $150 billion.
For some reason, the TPC did not include the permanent extension of the Bush tax cuts in its breakdown; however, there is general consensus among economists that the ten-year loss from extension of these cuts will be in the close vicinity of $1 trillion. Therefore, factoring in interest to the revenue loss total above, results in a revenue loss of $6 trillion.
Mitt Romney has also proposed spending an additional $2 trillion over the current projected 10-year spending. Mitt Romney’s task then becomes one of finding $ 8 trillion in offsets for the combined loss of revenue from the tax cuts and the additional $2 trillion of military spending. A start in doing that is the following:
1) Eliminate all tax preferences for the wealthy – $1.7 trillion.
2) Eliminate corporate tax benefits to offset the corporate tax cut – $1.1 trillion.
3) Eliminate all discretionary domestic spending – a little over $1 trillion.
By factoring in interest, the $8 trillion added to the deficit would be offset by a little over $4 trillion by doing the three things described above. After 10 years of following Mitt Romney’s fatally flawed tax plan, the only components of government left standing would be a superstrong military and Social Security, although Paul Ryan is a strong proponent of Social Security privatization.
As the comedian Steven Colbert has hilariously pointed out, why go through 10 years of no increase in governmental revenue, a huge increase in the deficit and the loss of tax preferences cancelling out tax cuts.