Domestic Taxes

Study: Romney tax plan would add to deficit

The Journal editorial page, which is influential among conservatives, has also said that President Obama’s fiscal commission was “bolder” with its plan to overhaul the tax code.

{mosads}For his part, Romney has said that his plan included just immediate steps on taxes and that he would eventually push further to lower rates and eliminate tax preferences.

On the tax front, the candidate has proposed extending all Bush-era tax rates, which are scheduled to expire at the end of the year and scrapping taxes on capital gains and dividends for those making under $200,000 a year.

Romney would also eliminate the estate tax and permanently fix the Alternative Minimum Tax, which frequently gets temporary patches.

On the business side, the former governor would lower the top corporate rate, from 35 percent to 25 percent, and move to a so-called “territorial” system — which would essentially limit U.S. taxation of foreign corporate profits.

Gingrich’s plan, by comparison, would add $1.3 trillion to the deficit in 2015 if the Bush tax rates expired, while Rick Perry’s plan would reduce revenues by $1 trillion that year.

If current policies were extended, the Romney plan would cut taxes for 42 percent of taxpayers in 2015, to the average tune of $2,900 a year, while 13 percent would pay more.

In all, those making under $50,000 a year also would be the most likely to see their tax bill rise.

According to the Tax Policy Center’s analysis, at least 16 percent of taxpayers in each of the five groups making below that total would see a tax hike, with the average increase ranging from roughly $750 to more than $1,000 a year.

The tax center largely chalks that increase up to Romney’s proposal to allow more generous refundable credits for families, enacted in the stimulus package, to expire.

Comparatively, more than half of taxpayers in each of the income groups starting at $50,000 a year would see a decrease in their tax bill.

The roughly 99 percent of taxpayers making more than $1 million annually would see an average tax break of more than $150,000 a year, the tax center found — while those making between $500,000 and $1 million would pay around $20,000 less a year.

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