William Gale, co-director of the Tax Policy Center, stood by his critical study of Mitt Romney's tax plan on Monday.
The study shows that if his plan were enacted, the Republican presidential candidate would mathematically be forced to limit popular middle-class deductions to pay for the across-the-board cuts. Romney's plan calls for a 20 percent reduction in marginal tax rates, plus the elimination of the estate tax and the alternative minimum tax.
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.
In an op-ed Monday, Gale used an analogy to explain the math:
Suppose Governor Romney said that he wants to drive a car from Boston to Los Angeles in 15 hours. And suppose some analysts employed tools of arithmetic to conclude that "If Governor Romney wants to drive from Boston to LA in 15 hours, it is mathematically impossible to avoid speeding." After all, the drive from LA to Boston is about 3,000 miles, so to take only 15 hours would require an average of 200 miles per hour. Certainly other road trips are possible -- but the particular one proposed here is not.
Especially in this inflamed campaign environment, one can imagine the frenzied responses. The Obama campaign might put ads out that say Romney wants to speed or is going to speed. Romney's campaign might respond by saying the study is a "joke" and "partisan," that he supports speeding laws and would never, ever speed, and it is ridiculous to suggest that he would. The Romney campaign and its surrogates might say that the analysts must be wrong because they don't even know what his road plan is or which car he would drive. Besides, Romney never really said he wanted to go LA, he might want to go somewhere closer; he could get to LA without speeding if he took more than 15 hours; he could get somewhere else in 15 hours without speeding. And so on.
Romney has dismissed the study as "garbage," and in last Wednesday's debate denied that he wanted a "$5 trillion tax cut," which the center has estimated as the cost of Romney's plan.
The TPC looked at Romney's plan and found that the benefits would go mostly to the rich.
But Romney denied this during the first presidential debate. "My view is that we ought to provide tax relief to people in the middle class. But I'm not going to reduce the share of taxes paid by high-income people," he said.
Romney has also said the plan won't increase the deficit and that it would be paid for by closing tax loopholes. Critics however, including President Barack Obama, have said there simply aren't enough loopholes to close in order to cover the cost of the cuts.
Under heavy pressure for not specifying the deductions that would pay for his tax plan, Romney said that he would cap deductions at $17,000. However, Gale told Bloomberg that doing so “doesn’t come close to paying for the $5 trillion."
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