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Saturday, October 13, 2012

The Futility of Base-Broadening to Pay for Massive Tax Rate Cuts

A quick one before hightailing it to the airport:

New JCT Study Shows Futility of Base-Broadening to Pay for Massive Tax Rate Cuts, by David Dayens: As long as the only thing we’re going to talk about for the next few weeks in the election is taxes, I might as well provide the update. The Joint Committee on Taxation, the “CBO for taxes” as it were, the nonpartisan scorekeeper on tax policy, just released a report that should end all discussion about the Romney campaign’s plans for a deficit-neutral 20% across-the-board rate cut.

Repealing all itemized deductions in the U.S. tax code would pay for only a 4 percent cut in income tax rates,... an estimate ... that casts doubt on Republicans’ ability to finance lower income-tax rates with base broadening....

...[T]his is not a perfect indicator of the Romney plan. But the basic principle applies, and it’s so far from the reality of what Romney wants to achieve – a 20% rate cut without adding to the deficit, and without an increase on the middle class – that I think it serves as more evidence of the futility of the exercise. ...

Mark Zandi, the Moody’s.com economist always trotted out to bless this or that plan, admitted today that the Romney plan is mathematically impossible....

    Posted by on Saturday, October 13, 2012 at 08:18 AM in Economics, Politics, Taxes | Permalink  Comments (26)

          


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