Heritage joins chorus against tax study critical of Romney

The Heritage Foundation has joined the conservative chorus criticizing a think-tank study asserting that Mitt Romney’s tax plan would shift some of the tax burden from the wealthy to the middle-class. 

Like other conservative critics, Curtis Dubay of the Heritage Foundation said the Tax Policy Center prematurely assumed that Romney, the GOP presidential nominee, would leave certain tax breaks alone in his efforts to reform the tax code. 

Dubay noted Tuesday that the Tax Policy Center analysis took the preferences for interest on life insurance savings and municipal bond interest off the table, a point previously made by the American Enterprise Institute and The Wall Street Journal editorial page. 

The Heritage study adds that the TPC study wrongly assumed that Romney, whose plan would scrap the estate tax, would not make any changes to the so-called “step-up in basis” that limits taxes on inherited property. 

It also criticizes the tax center for not taking into account how a broad-based tax reform would spur economic growth, and said the center did not appear to take into account Romney's desire to keep the distribution of the tax burden roughly the same among income levels. 

“Making these changes in the authors’ assumptions would undo the headline-grabbing conclusion that Governor Romney’s tax reform plan would cut taxes on the rich and raise taxes on middle-income and low-income taxpayers,” Dubay wrote. 

Dubay added that, while TPC is the “industry standard” on tax data, this particular report “hinders the debate on tax reform because lawmakers and the public need accurate information to make good decisions.”

Romney himself has also been sharply critical of the Tax Policy Center study, saying it made “a garbage conclusion.” 

But the center, a joint venture of the Urban Institute and the Brookings Institution, has stood by its main point – that Romney’s plan doesn’t add up. 

As TPC notes, the former Massachusetts governor has called for an across-the-board income cut rate of 20 percent; keeping current rates on capital gains for the highest earners and eliminating them for the middle-class; and getting rid of the estate tax and the Alternative Minimum Tax. 

TPC says meeting those goals while taking in the same amount of revenue, another goal of Romney’s, “would then imply increased tax burdens on other taxpayers, a necessary but perhaps unintended consequence.”

The back-and-forth comes as the TPC study continues to be cited by the Obama campaign, and as Romney has come under some criticism for not being more upfront about what tax breaks he would like to limit in a reform effort.

Romney and his running mate, Rep. Paul Ryan (R-Wis.), have said they would like to work those details out with Congress, a stance that’s been embraced by GOP lawmakers.  

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