The nonpartisan Tax Policy Center has completed an examination of GOP presidential candidate Mitt Romney’s latest tax cut details — and once again found problems with the math.
Romney wants to lower all individual rates, cut the corporate rate from 35 percent to 25 percent, end the estate tax, end the Alternative Minimum Tax and eliminate capital gains taxes.
He has pledged to do this without adding to the deficit, without reducing the tax burden for the wealthy and without raising taxes on the middle class.
TPC has previously estimated that together these proposals reduce government revenue by $4 trillion on the individual side and another $1 trillion on the corporate side over 10 years. This does not count extending the Bush-era tax rates for the wealthy.
In a new analysis, TPC says that eliminating all itemized deductions would generate only $2 trillion, well short of paying for all the cuts.
A $25,000 cap raises even less revenue, only $1.3 trillion.
The group also finds that wealthy taxpayers disproportionately itemize deductions, so the cap proposal would put more of the burden on them.
A $25,000 cap would mean 90 percent of the revenue gains from eliminating tax breaks comes from the top 20 percent of taxpayers and half comes from the top 1 percent.
“Suggesting limits on deductions was Governor Romney’s first public statement about how he might offset the revenue lost by cutting tax rates. Without more specifics, we can’t say how much revenue such limits would actually raise. But these new estimates suggest that Romney will need to do much more than capping itemized deductions to pay for the roughly $5 trillion in rate cuts and other tax benefits he has proposed,” TPC’s Roberton Williams writes.
His post on the findings is here.
President Obama and Romney fought hard over the math in Romney's tax proposal during the Tuesday debate. He calling it a "sketchy deal" based on the numbers.
"Well of course they add up," an angry Romney shot back.