Nonpartisan study: Tax cut for rich, tax hike for everybody else under Romney plan

WASHINGTON — Mitt Romney’s plan to overhaul the tax code would produce cuts for the richest 5 percent of Americans — and bigger bills for everybody else, according to an independent analysis released Wednesday.

The study was conducted by researchers at the nonpartisan Tax Policy Center, a joint project of the Brookings Institution and the Urban Institute, who seem to bend over backward to be fair to the Republican presidential candidate. To cover the cost of his plan — which would reduce tax rates by 20 percent, repeal the estate tax and eliminate taxes on investment income for middle-class taxpayers — the researchers assume that Romney would go after breaks for the richest taxpayers first.

They even look at what would happen if Republicans’ dreams for tax reform came true and the proposal generated significant revenue through economic growth.

None of it helped Romney. His rate-cutting plan for individuals would reduce tax collections by about $360 billion in 2015, the study says. To avoid increasing deficits — as Romney has pledged — the plan would have to generate an equivalent amount of revenue by slashing tax breaks for mortgage interest, employer-provided health care, education, medical expenses, state and local taxes, and child care — all breaks that benefit the middle class.

“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 study concludes.

Even if tax breaks “are eliminated in a way designed to make the resulting tax system as progressive as possible, there would still be a shift in the tax burden of roughly $86 billion ⅛a year€ from those making over $200,000 to those making less” than that.

What would that mean for the average tax bill? Millionaires would get an $87,000 tax cut, the study says. But for 95 percent of the population, taxes would go up by about 1.2 percent, an average of $500 a year.

The Romney campaign on Wednesday declined to address the specifics of the analysis, dismissing it as a “liberal study.” Campaign officials noted that one of the three authors, Adam Looney of Brookings, served as a senior economist on the Obama Council of Economic Advisers. The other two authors are Samuel Brown and William Gale, both of whom are affiliated with Brookings and the Tax Policy Center.

“President Obama continues to tout liberal studies calling for more tax hikes and more government spending. We’ve been down that road before — and it’s led us to 41 straight months of unemployment above 8 percent,” said Romney campaign spokesman Ryan Williams. “It’s clear that the only plan President Obama has is more of the same. Mitt Romney believes that lower tax rates and less government will jump-start the economy and create jobs.”

More in Local News

Herald photos of the week

A weekly collection of The Herald’s best images by staff photographers and… Continue reading

This week’s Herald Super Kid is Nathan Nicholson of Snohomish High School. (Dan Bates / The Herald)
‘The future is biotech,’ but for now he’s busy with everything

Snohomish senior Nathan Nicholson is a student leader and media master.

Longboarders from near and far hit the trail in Arlington

The Centennial Sk8 Festival was serious competition for some and just for fun for others.

Council passes six-month moratorium on safe injection sites

Proposal by County Councilman Nate Nehring passed unanimously.

Terrace woman held following collision in Everett

The three occupants in vehicle were transported to a local hospital in serious condition.

Information sought on drive-by shooting in Everett

Debris from an apparent crash, evidence of gunfire found in the 2800 block of California Street.

Crews recover body of man who fell over Wallace Falls

The area where the man fell is called Sky Valley Lookout, 2.4 miles from the parking lot.

Big fire destroys building on Broadway in Everett

A person was rescued, but there were no immediate reports of injuries.

Luring attempt reported in Mountlake Terrace

The driver allegedly instructed a boy to get in the truck and help grab a scooter he was giving away.

Most Read