The authors of a study analyzing Mitt Romney's tax plan are standing by their findings after the presumptive GOP nominee called their work "garbage."
The nonpartisan Tax Policy Center looked at Romney's plan to slash rates by 20 percent for everyone, and found that the benefits would go mostly to the rich. The plan also would eliminate the estate tax, the alternative minimum tax and the capital gains tax for all but wealthy taxpayers. Romney has outlined his ideas, with few specifics.
Romney advisers have claimed the plan is revenue-neutral. Romney has said he will offset revenue losses from the tax cuts by eliminating unspecified loopholes. The Tax Policy Center concluded that fulfilling all of these goals while reducing the amount the U.S. Treasury takes in -- and making generous assumptions about the deductions and loopholes enjoyed by the wealthiest U.S. taxpayers -- would cause tax bills to rise for middle- and low-income taxpayers.
Romney slammed the study in an interview with Fortune magazine published Wednesday. "They made an assumption that I would reduce the home mortgage-interest deduction. I will not do that for middle-income taxpayers, as I have already indicated," Romney said. "There's an old expression in the computer world: garbage in, garbage out. They made garbage assumptions and they reached a garbage conclusion."
The authors replied that the plan would have no choice but to eliminate popular deductions if it's revenue-neutral and cuts taxes. "Nevertheless, it remains true -- as we showed in our paper -- that a reform proposal that meets the five goals stated above would have to raise burdens on middle-class households."
Supply-side economics would dictate that cutting tax rates would increase revenue, but the authors reject that. "Estimates from the Congressional Budget Office and other sources indicate that the effects of tax cuts on the macroeconomy are likely to be small or even negative over the typical 10-year budget window, depending in part on how they are financed," they write.
The study has been cited by President Barack Obama, who called the plan "Romney-hood," saying that it would take from the poor and give to the rich.