Governor Romney has a problem: There is only one way to pay for his $5 trillion in tax cuts for the wealthy, and that’s higher middle class taxes. Since Governor Romney won’t release his own plan, he is desperately attacking the President’s plan to distract voters.
Yesterday, he claimed that President Obama’s plan would raise middle class taxes by $4,000. What he didn’t mention was that, by the same math, the middle class would pay $5,300 unless we act on the President’s deficit plan. In other words, the study—if taken at face value—shows the President’s budget is actually a $1,300 tax cut.
The President has put forward a plan that reduces the deficit by over $4 trillion over the next decade without raising taxes on any middle-class families. And it has nothing to do with how the President has proposed to address our deficit challenges—which includes a combination of spending cuts and additional revenues from the wealthiest Americans. Instead, the American Enterprise Institute paper attempts to illustrate the costs of deficits by asking how much interest on the deficit would cost taxpayers if it was all paid for by higher taxes.
It’s all on page 15 of the report. If you look at the middle-class families Romney is describing—those earning between $100,000 and $200,000—you’ll see that their current “tax burden” based on projected deficits over the next decade is $3,743. If the President’s deficit reduction plan were enacted, that number would decline to $2,453. That’s a nearly $1,300 tax cut.
The Romney campaign comes to their conclusion by attributing the costs of the deficits in the 14 years between 2009 and 2022 to the President—even though the deficits in President Obama’s first term were largely due to prior policies and the recession, and his plan would cut the deficit in half by 2014, according to the independent Congressional Budget Office.
Of course, if Romney did the same misleading math he applies to the President in his ad to his own budget plan, he’d find that he is “raising middle class taxes” even more. Using Romney’s own math, unless he fully eliminated the deficit on the day he took office—a step that he himself admits would devastate the economy—he would be “raising middle class taxes.” And since Romney has proposed $5 trillion in tax cuts and $2 trillion in added defense spending that he would need to pay for before he makes even a dollar of progress towards deficit reduction, his plan would show thousands of dollars in tax increases himself.
But here’s the thing: We don’t need to distort hypothetical studies to show that Romney’s tax plan would raise middle class taxes. Romney just needs to ask his own advisors who have made it clear that the only way his tax plan add up is by raising taxes on the very taxpayers he is talking about in his ad.