Romney Tax Plan Would Balloon the Defecit
WASHINGTON | Thu Jan 5, 2012 8:08pm EST
(Reuters) – U.S. presidential hopeful Mitt Romney’s tax plan would cut revenues and increase the government’s budget deficit, while benefiting wealthy taxpayers more than others, said a report from a non-partisan think tank released on Thursday.
The Republican front-runner’s campaign responded with a defense of his plan and criticized President Barack Obama’s record on taxes, saying it has “stunted” economic growth.
The Romney plan, said tax analysts, offers a middle-of-the-road tax package – not as daring as the radical flat-tax proposals offered by some of his competitors, but conservative enough to please Republican voters.
“It is a more pragmatic plan than some of the other plans that we’ve seen,” said Clint Stretch, managing principal at Deloitte Tax LLP. “It takes some fairly orthodox, but traditional Republican positions.”
The new report from the Tax Policy Center scored Romney’s plan on its cost and effect on taxpayers at different income levels. It estimated the plan would cut federal tax revenue by $600 billion, or 16 percent, in 2015.
This estimate assumes the Bush tax cuts are allowed to expire at the end of this year, as presently planned. If the Bush tax cuts do not expire, Romney’s plan would cut revenues by $180 billion in 2015, the center said.
“A Romney administration’s revenue agenda would look a lot like President George W. Bush’s, just more so,” said Howard Gleckman, resident fellow at the center, which also has analyzed the tax plans of other Republican presidential contenders, including Newt Gingrich, Rick Perry and Herman Cain.
The report comes as conservatives have been criticizing Romney, a former governor of Massachusetts, for not being bolder and clearer about how to fix a loophole-riddled tax system that falls far short of funding the government.
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Jan. 6 (Bloomberg) — Republican presidential candidate Mitt Romney is heading into the New Hampshire primary faced with a study that says his tax plan would add $600 billion to the federal deficit in 2015.
A study released yesterday by the nonpartisan Tax Policy Center in Washington compared the revenue that Romney’s tax-code changes would generate with the revenue the U.S. is expected to collect under current law, which assumes that several income tax cuts will expire as scheduled at the end of 2012.
Though the Tax Policy Center said Romney’s tax plan would “reduce federal tax revenues substantially,” the budget hit isn’t as severe as some of his competitors. The same group previously said former U.S. House Speaker Newt Gingrich’s tax plan would increase the deficit by $1.3 trillion and that Texas Governor Rick Perry’s proposal would boost the shortfall by $995 billion.
Romney’s proposal “does more changing around the edges than wholesale getting rid of things,” said Roberton Williams, a senior fellow at the Tax Policy Center. “He would, for instance, maintain the tax on capital income for high income folks, which brings in a lot of money.”
Romney, a former Massachusetts governor, is hoping to solidify his front-runner status in the Republican race with a victory in New Hampshire’s Jan. 10 primary after winning the Iowa caucuses by eight votes on Jan. 3. Former U.S. Senator Rick Santorum of Pennsylvania finished just behind Romney in Iowa.
Visual source: Newseum
Mr. Romney claims that Mr. Obama has been a job destroyer, while he was a job-creating businessman. For example, he told Fox News: “This is a president who lost more jobs during his tenure than any president since Hoover. This is two million jobs that he lost as president.” He went on to declare, of his time at the private equity firm Bain Capital, “I’m very happy in my former life; we helped create over 100,000 new jobs.” But his claims about the Obama record border on dishonesty, and his claims about his own record are well across that border. […]
Well, Glenn Kessler of The Washington Post got an answer from the Romney campaign. It’s the sum of job gains at three companies that Mr. Romney “helped to start or grow”: Staples, The Sports Authority and Domino’s.
Mr. Kessler immediately pointed out two problems with this tally. It’s “based on current employment figures, not the period when Romney worked at Bain,” and it “does not include job losses from other companies with which Bain Capital was involved.” Either problem, by itself, makes nonsense of the whole claim.