As the chart shows above – Romney REALLY isn’t worried about poor people; he wasn’t kidding. We’ve shown other analysis’ of Mitt Romney’s tax plan HERE, HERE, and HERE. A few things to note about his tax plan:
#1 - Under this plan the wealthiest Americans receive the largest benefit in tax cuts and poor people will PAY MORE in taxes.
#2 – Mitt Romney’s math is based off of something called “dynamic scoring”; dynamic scoring essentially means that their is a built in assumption that these tax cuts will drive economic growth that has yet to be proven. The additional assumption here is that “tax cuts pay for themselves”…or as you’ll often hear a politician claim – by cutting taxes…we’ll be able to raise more revenues through economic growth. But as Simon Johnson – Professor at MIT and former chief economist at the IMF – explains:
The bottom line is that betting that tax cuts will pay for themselves is a high-risk strategy and not a good idea at our current levels of government debt relative to gross domestic product. We do not have a large margin for error.
Source: Economix: Simon Johnson
Ezra Klein writes more about Mitt Romney and his “Dynamic Scoring Dodge” HERE.
#3 - The Mitt Romney Plan would add $9.1 trillion to deficit over 10 years without offsetting spending cuts. America is currently sitting on a $1 trillion deficit precisely because it is not raising enough in revenues. When it is all said and done under Mitt Romney’s plan…America will have to borrow more money and we’re going to have to make sizable cuts to Social Security and Medicare benefits in order to pay for these tax cuts for the rich. President Obama has passed tax cut after tax cut (targeted to the middle class) and while these middle class tax cuts have helped grow the economy but they have not paid for themselves.
Assuming the tax cuts would not take effect until January 1, 2014, this translates into a revenue loss of $4.9 trillion over the 2013-2022 period. This estimate assumes the revenue losses continue to equal 2.7 percent of GDP throughout the period, a standard assumption for estimating the effects of tax proposals over time.
These TPC figures measure revenue losses compared to a baseline that assumes all of the Bush tax cuts are extended. TPC’s analysis also finds that compared to a “current-law baseline” — which assumes the Bush tax cuts, AMT relief, and normal “tax extenders” (such as the research and experimentation tax credit) expire on schedule — the new Romney proposals would lose about $900 billion in 2015.  That translates into a revenue loss of $9.1 trillion over the next ten years.
If you like trickle down economics – you will LOVE Mitt Romney’s tax plan. According to the Center on Budget and Policy Priorities:
TPC estimates that people who make over $1 million a year would get an average tax cut of $250,000 in 2015 (increasing their after-tax income by an average of almost 12 percent), while people making between $40,000 and $50,000 would get an average tax cut of $512 (increasing their after-tax income by an average of less than 1 percent), and people making between $10,000 and $20,000 would pay an average $174 more in taxes (decreasingtheir after-tax income by an average of 1.1 percent).
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