The Question I Want to See Asked Tonight
It goes to Romney:
Are there any tax expenditures on savings and investment that you would eliminate or reduce and if so, what are they?
If the answer, is no, well then the math simply does not add up for his plan to be feasible.
But if the answer is yes, then things get more interesting. The Tax Policy Center’s analysis of Romney’s tax plan found that it either had to raise taxes by $86 billion on the middle class or else not be revenue neutral. The numbers couldn’t add up.
But Alex Brill at the American Enterprise Institute dug into the numbers and found some areas where Romney’s plan could possibly gain revenue without raising taxes on the middle class. Some are legitimate complaints. Some aren’t.
In Brill’s analysis, the numbers come out to a $1 billion tax cut for the middle class. But it includes the specific assumption that Romney will eliminate tax deductions for high earners on savings and investment. Specifically, Brill and AEI colleague Matt Jensen found $45 billion from the exclusion of interest on state and local bonds and the exclusion of inside buildup on life-insurance products. But, these are tax exclusions on savings and investment.
If Romney refuses to eliminate those exclusions, then even under the AEI analysis, the math doesn’t add up. It’d be a $44 billion tax increase on the middle class.
So, which is it Governor Romney, eliminate those tax exclusions or raise taxes on the middle class?