A report released today by the influential Brookings Institute concludes that Mitt Romney’s tax plan would lower taxes on wealthy taxpayers, but increase taxes on lower- and middle-income taxpayers to offset the loss in revenue—a conclusion that President Obama seized on to hammer Romney today in Ohio.
“If Gov. Romney wants to keep his word and pay for this plan, then he’d have to cut tax breaks that middle-class families depend on to pay for your home, the home mortgage deduction; to pay for your health care, the health care deduction; (or) to send your kids to college,” the president said.
“And here’s the thing: He’s not asking you to contribute more to pay down the deficit, he’s not asking you to pay more to invest in our children’s education, or rebuild our roads or put more folks back to work,” Obama said in Mansfield, Ohio. “He’s asking you to pay more so that people like him can get a big tax cut.”
The former Massachusetts governor has called for extending the tax cuts first championed by President George W. Bush in 2001 and 2003 and extended by Obama in late 2010.
According to the Brookings study (which was co-authored by Adam Looney, a former member of President Obama’s Council of Economic Advisers), the proposed reductions in individual and estate taxes specified in Romney’s plan would decrease federal tax revenues by $360 billion in 2015.
“These tax cuts predominantly favor upper-income taxpayers: Taxpayers with incomes over $1 million would see their after-tax income increased by 8.3 percent (an average tax cut of about $175,000), taxpayers with incomes between $75,000 and $100,000 would see somewhat smaller increases of about 2.4 percent (an average tax cut of $1,800), while the after-tax income of taxpayers earning less than $30,000 would actually decrease by about 0.9 percent (an average tax increase of about $130) due to the expiration of the temporary tax cuts enacted in 2009 and extended at the end of 2010,” the study said.