As we gear up for tonight’s Presidential Debate rematch, Mitt Romney’s tax plan has been coming under plenty of scrutiny. And for good reason—he hasn’t provided the details for how it’s supposed to work, and Bloomberg reminds us that in 2000 Bush insisted his plan would be great for the middle class while independent studies said it was impossible. Sure enough, his 2001 tax policy “delivered almost half of its benefits to the top 1 percent and initiated Bush’s march toward a trillion-dollar deficit.”
So understanding exactly what Romney is proposing here is important. What he’s proposing is a 20% reduction in income tax to the tune of $5 trillion. The reason he says he’s not proposing a $5 trillion tax cut is that he says he’ll turn around and pay for those tax cuts by ending tax deductions on things like mortgage interest and charitable donations. (Romney and Ryan and have sorta-kinda implied that they’ll still keep some deductions in place for the middle class but haven’t committed to that.)
So Stephen Colbert asked an incredible question: If you’re going to lower everyone’s taxes by 20% and then pay for it by raising the taxes they’ll have to pay once the deductions are gone, why bother lowering them in the first place? Isn’t it just a wash?
Anyway the big problem here, as the non-partisan Tax Policy Center points out and as Bill Clinton explains below, is that no matter how many tax deductions you end (thereby raising taxes), you still can’t reach the amount equal to cutting income tax by 20%. The numbers don’t add up.
Which is why, if Romney says otherwise at tonight’s debate, he will be lying, just as Bush was lying in 2000 when he promised his tax policy would benefit the middle. It didn’t. Check out Clinton below.