“Give me an example of a [tax] loophole that you would close?” asked “Meet the Press” moderator David Gregory of Republican nominee Mitt Romney.
Replied Romney: “I can tell you that people at the high end, high-income taxpayers, are going to have fewer deductions and exemptions. Those numbers are going to come down. Otherwise they’d get a tax break. And I want to make sure people understand, despite what the Democrats said at their convention, I am not reducing taxes on high-income taxpayers,”
Perhaps Romney has some problems with the concept of “an example.” But more likely, Team Romney has decided to see if they can get all the way to Election Day without disclosing the details that would make it possible for voters to ascertain whether his tax plan adds up.
I appreciate Gregory’s question. I wished he had pressed harder. I wish he had said precisely that he had asked for a concrete example and received only a glittering generality. If he had not received the specifics, I wish he had asked Romney how he could justify not disclosing the deductions and exemptions that he proposes to reduce or eliminate. Romney should be asked those questions at every opportunity until he answers them. And frankly, he needs to provide more than one example of a loophole he would close. He needs to put out the plan so neutral experts can assess whether it’s possible for the plan to do all the things that Romney says it will do or whether it is a spectacular pander.
Gregory’s interview with the Romneys, conducted over two days and aired Sunday on “Meet the Press,” lasted more than half an hour. The interview was billed as “clarifying” the “specifics” of Romney’s policy proposals, but very little actually got clarified.
The other headline from the interview, for example, is that Romney said that when he repeals the Obamacare law, he will maintain the guarantee of insurance for those with pre-existing conditions. Two problems with that as a “specific.” That very popular element of the Obama program would bankrupt the private insurance companies, or drive premiums through the roof, unless it is coupled with the other elements of the Obama law, specifically the requirement that everyone, including healthy young “free-riders,” get insurance or pay a penalty/tax. Until we hear specifics about how Romney would address that issue, his new promise to preserve the guarantee of coverage for those with pre-existing conditions is like his promise to cut everyone’s tax rate without adding to the deficit.
The tax plan starts with a cut of 20 percent in all of the marginal tax rates. The wealthiest families currently pay 35 percent on joint adjusted gross income over $357,700, so Romney’s rate cut would reduce that by seven points to 28 percent. The least wealthy taxpayers, who pay a marginal rate of 10 percent on adjusted gross income of $16,050, would get a cut of two percentage points to 8 percent.
Everyone’s rate goes down and Team Romney is willing to be quite specific about how much it goes down. In a piece this morning about Romney’s tax plan, the New York Times said the rate cuts by themselves would bring down federal revenue by hundreds of billions of dollars.
But the plan is also supposed to “revenue neutral,” meaning it raises as much revenue as the current tax code and adds nothing to the deficit. And, Romney also claims, it will not make the tax code more regressive. He specified to Gregory that the share of taxes paid by the wealthy will not go down (Romney: “We’re not going to have high income people pay less of the tax burden than they pay today”), and I guess it will even make the distribution of the tax burden it more progressive (“I do want to bring taxes down for middle income people”).
There seems to be an arithmetic problem with a plan that brings taxes down on the middle class but doesn’t raise them on the upper class but is revenue neutral. Maybe it’s the magic of supply-side stimulus? Or maybe Romney believes his plan actually will raise taxes on the upper class despite the fact that it starts by cutting the marginal rate for the upper class by seven percentage points. Dunno. He won’t say.
The key missing ingredient is, of course, the changes he would make in deductions, credits and exemptions. The liberal-leaning Tax Policy Center says it’s not possible to make all the moving parts by changes in credits and deductions. In his interview with Gregory, Romney said other studies have disagreed. Well this should be easy to settle.
Tell us please, preferably before Election Day, which deductions, credits and exemptions you will eliminate or reduce or change or whatever so that the wealthiest families, despite getting a seven-percentage-point cut in their marginal rates, will not get a net cut.