Mitt Romney, at a press conference today:
“The president’s ad saying I’m gonna raise taxes on the middle class? That’s patently, simply false.”
The Obama campaign has jumped on this quote today, arguing that this week's Tax Policy Center/Brookings study does shows that Romney’s plan would raise the middle class’ tax burden, and that Romney’s statement today is false. But I think this is the wrong way to look at what Romney said.
The real point to be drawn from Romney’s assertion is that he has admitted his tax cuts won’t be paid for. Which means that his plan would explode the deficit.
This is the inescapable conclusion to be drawn from Romney’s own words, if you take them at face value and assume that he means what he says. If Romney is telling us that his plan, as implemented, won't raise the middle class’s tax burden, what that means is that his plan won’t close the loopholes that the middle class enjoys. The Tax Policy Center/Brookings study finds that the only way the plan could pay for its across-the-board 20 percent tax cut — which disproportionately benefits the rich — is by closing those loopholes. Therefore, if Romney doesn’t intend to close those loopholes, the tax cuts will not be paid for.
I ran this by one of the study’s authors, Adam Looney of Brookings. “Any plan that takes those rate cuts and makes them revenue neutural has to raise taxes on middle and lower income taxpayers,” Looney tells me. “Otherwise the tax plan isn’t paying for its cuts.”
Romney could argue that the cost of the tax cuts will be offset not by closing middle class loopholes, but with spending cuts. But until he details what those cuts would be, his plan either raises taxes on the middle class or it doesn’t pay for itself. Period. Romney supporters will also argue that the boost in revenues created by runaway growth caused by the tax cuts will allow them to pay for themselves. But the consensus of mainstream economists is that this is nonsense.
Here’s what we’re left with. As Josh Barro put it today: “If your tax plan is revenue-neutral, as Romney’s campaign sometimes says his plan is, and it cuts taxes on somebody, it has to raise taxes on somebody else.” But Romney today said his plan won’t raise taxes on “somebody else.” Therefore, it can’t be revenue neutral. The math is inescapable.
If we take Romney at his own word today that his plan won’t raise the middle class’ tax burden, then he has confirmed that his tax cuts won’t be paid for. I’d say that’s pretty newsworthy, and I hope reporters will press Romney to explain why this isn’t the case.