"Romney’s defense of his tax plan doesn’t add up" at Washington Post

[applegrove]

Romney’s defense of his tax plan doesn’t add up

Posted by Suzy Khimm at WP

http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/02/romneys-defense-of-his-tax-plan-doesnt-add-up/

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Mitt Romney’s campaign swiftly responded to the Tax Policy Center’s damning analysis of his tax plan by arguing that it was woefully incomplete. By only analyzing his reforms for individual tax rates, it said, the study didn’t take into account the corporate tax reform that Romney is proposing or the economic boost that would accompany those changes. “These glaring gaps invalidate the report’s conclusions,” Lanhee Chen, Romney’s policy director, said in a statement.

But even if the corporate piece of Romney’s tax plan were included, it wouldn’t drastically change the Tax Policy Center’s conclusion that Romney’s proposal would burden lower-income Americans while cutting rates for the top 5 percent, or else would increase the deficit, according to William Gale, the Brookings Institution economist who co-authored the study.

As with individual rates, Romney wants to close corporate tax breaks—i.e. “broaden the base”—to pay for lowering rates to 25 percent. The problem, Gale says, is that even closing corporate loopholes can only get you part of the way there, according to Congress’s own nonpartisan tax office. “The Joint Committee on Taxation recently suggested that 28 percent is the lowest possible corporate tax in a revenue-neutral tax reform that paid for lower rates by eliminating business tax breaks,” Gale points out.

What’s more, the JCT assumed that would mean getting rid of a tax break that allows multinational corporations to defer U.S. taxes until the profits are brought home—a tax break that Romney actually wants to expand. So according to the JCT, you can’t simply rely on closing tax breaks to pay for lower corporate tax rates as much as Romney promises to do, and it would be even harder if you include the tax break for deferral that Romney wants to expand.

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[Angry Dragon]

1. Willard needs to put out some examples so the people can see

it is one thing to say how it should work vs how it actually works