Mitt Romney Has A Plan; Studies Show it Will Work

• Paul Ryan says that cutting tax rates by 1/5 is non-negotiable--that even if Congress does not eliminate a single deduction, the Ryan-Romney administration will cut tax rates by 1/5.
• Cutting tax rates by 1/5 boosts the national debt in a decade by $5 trillion plus interest.
• Mitt Romney has, by now, said pretty much everything it is possible to say about the place of the 1/5 tax rate cut--from claiming that he will not cut tax rates at all if Congress won't eliminate deductions, to claiming that the tax rate cut will pay for itself through faster economic growth without any cuts in deductions.
• Paul Ryan has at least a consistent message.
• Families making over $200,000/year will over the next decade receive $1.7 trillion in non-savings deductions: health insurance, home mortgages, charitable contributions, etc.
• Families making over $200,000/year would over the next decade receive $2.7 trillion from Romney's 1/5 rate cut.
• Even were Congress to eliminate all non-savings deductions, families making over $200,000/year would get a $1 trillion tax cut from Romney.
• By arithmetic, if Romney keeps his promise to make his tax cut for the rich revenue-neutral, households making less than $200,000/year would get a $1 trillion or more tax increase--more if the over $200,000/year crowd retain any of their deductions at all.
• Romney has by now promised not just to leave savings deductions untouched and to implement his 1/5 tax rate cut but also to make the plan as a whole revenue neutral and to not lower taxes on the "rich": it just cannot be done.
• Romney claimed six studies support him. Romney lied. Romney's six are:
  
  • Alex Brill says Romney would have to raise taxes on life insurance policies and state and local bonds--thus breaking Romney's commitment not to tax savings--eliminate all deductions for the $200,000/year plus crowd, and still not be revenue neutral: Brill ha to add a Medicare and an economic growth magic asterisk.
  • John Diamond says that you could write a plan that would be revenue neutral, but he doesn't have enough information to model Romney's plan.
  • Martin Feldstein says that Romney could pay for it if he retains the Estate Tax--which Romney has promised to eliminate--and massively raises taxes on all households making between $100,000/year and $200,000/year by eliminating all of their deductions as well.
  • Harvey Rosen also says that Romney could pay for it if he retains the Estate Tax--which Romney has promised to eliminate--and massively raises taxes on all households making between $100,000/year and $200,000/year by eliminating all of their deductions as well.
    
    • Two Wall Street Journal op-eds that contain no analysis whatsoever.
• Thus there are only four studies on Romney's list, and none of them say what he claims they say.
  HT DeLong