"It is not mathematically possible to design a revenue-neutral plan that preserves current incentives for savings and investment and that does not result in a net tax cut for high-income taxpayers and a net tax increase for lower- and/or middle-income taxpayers," the study concludes. Even if tax breaks "are eliminated in a way designed to make the resulting tax system as progressive as possible, there would still be a shift in the tax burden of roughly $86 billion [a year] from those making over $200,000 to those making less” than that. What would that mean for the average tax bill? Millionaires would get an $87,000 tax cut, the study says. But for 95 percent of the population, taxes would go up by about 1.2 percent, an average of $500 a year.
Chait underscores a key point:
[T]he study embraces implausibly friendly assumptions as to how Romney would go about [raising revenue from deleted deductions]. It assumes he would ruthlessly purge the tax code of breaks for the rich, even highly popular ones like the charitable deduction. It further assumes that, in order to wring every last penny out of the rich, Romney would cut off all deductions immediately for every dollar in income over $200,000 a year.
And yet the net result is still in the end a redistribution of resources from the poor and middle class to the very rich. Even deploying supply-side hooey fails to help much:
[E]ven when you do take the economic stimulus of tax cuts into account, Romney’s tax reductions still don’t come close to making up for the lost revenue. The Tax Policy Center used a "dynamic scoring" model that factors in the impact of economic growth brought on by tax cuts, devised by Romney adviser and Harvard professor Greg Mankiw and Harvard’s Matt Weinzierl. It’s exactly the kind of analysis that Republicans have been clamoring for, and the TPC finds that Romney’s individual tax cuts wouldn’t come close to paying for themselves.
Clive Crook piles on:
It's even worse than it looks, because Romney's plan is being measured here against a "current policy" baseline (in which the Bush tax cuts are extended). If it were measured against a "current law" baseline, it would look even more regressive–and it would also fail to be revenue neutral. [Bloomberg's] Paula Dwyer writes a nice column on the findings. I agree with her conclusion. Romney's plan looks "both politically infeasible and mathematically pie-in-the-sky".
And the Romney response? Does he have any data to push back on the study, any substantive rebuttal? Nah – this is the Romney campaign:
[His] campaign is pushing back saying the report was conducted by a "liberal" group. However, TPM finds the Romney campaign cited the same group as "objective, third party analysis" during the Republican presidential primary season.
Over to you, Josh Barro.