[Image: Henry Blodget]
Meet the new Romney tax plan, same as the old Romney tax plan. It’s a massive tax cut for the rich, a small tax cut for the middle class, and a tax hike for the poor. That adds up to mega-deficits. How mega? Well, the Tax Policy Center calculates Romney’s $25,000 cap would raise about $1.3 trillion over a decade — against almost $5 trillion in tax cuts over that period. And remember, that’s a $3.7 trillion hole relative to a world with the Bush tax cuts. It’s an almost $8 trillion dollar hole compared to a world with Bill Clinton-level taxes.
Read more. [Image: Reuters]
[Image: Ritchie King]
Mitt Romney is worried that half of make the wealth and half of us take the wealth. So is his running mate Paul Ryan. If this sounds like something out of a dystopian novel, that’s because it is. The world we live in is far different from the world Ayn Rand imagined. Just take a look at total taxes.
The chart above, from the Citizens for Tax Justice, looks at how much households earn and how much they pay in all taxes. In other words, it compares what percent of overall income they make and what percent of overall taxes the government takes from them. It’s not exactly a picture of moochers waging war on heroic entrepreneurs.
Read more. [Image: Citizens for Tax Justice]
Mitt Romney isn’t a big fan of the 47 percent of people who pay no federal income tax. But there’s a small problem. Romney himself might have been a member of the 47 percent as recently as 2009. […]
As Joshua Green of Businesweek has speculated, it’s possible that Romney suffered big enough losses during the 2008 market crash that he zeroed out his 2009 federal income tax liability. Of course, Romney has claimed that he never paid less than a 13 percent effective federal rate the last decade … but he refuses to release any tax returns from before 2010. That’s not to say that Romney is necessarily lying, just that we have no way to check. Consider that six of the top 400 tax filers — a group making nearly ten times as much as Romney — paid nothing in federal income taxes in 2009. It’s certainly plausible that Romney was a member of the 47 percent in 2009.
Read more. [Image: Reuters]
[Image: Derek Thompson]
[Image: Tax Foundation]
Romney wants to cut rates and cut loopholes but keep everybody’s taxes the same. That’s the implication of a revenue neutral plan where the rich pay the same share and the middle class pay the same amount. It’s just a complicated way of saying nobody’s tax bills change. But we’re back to the same old problem: the rich pay a lower effective federal tax rate under Romney’s plan, so they won’t pay the same share. Unless they have more money than we’ve assumed.
But there is one way that Romney’s plan works mathematically: Income inequality explodes. If enough growth goes to the top 5% of earners, they will get rich enough to fill the revenue hole.
Read more. [Image: Matthew O’Brien]