Fake Headline: Romney tax policy advisers say “Math is hard!”
There are many ways to demonstrate that Mitt Ronmey is not speaking honestly about his plan to cut taxes. First there was the “20% tax cut, paid for by removing deductions”, then it was shifted to “rich people won’t pay a lower percentage than they do now” and throughout it has been “I won’t raise taxes on the middle class”.
In all of these shakes of the etch-a-sketch, there was a core idea that *everyone* loves to repeat on cable television: cut rates and broaden the base. Cutting rates is self-explanatory: if the marginal tax rates are 10%, 15%, 20%, 28%, 25% now, Romney wants them to be lower for each level.
Where the math catches up with Romney is on the ‘tax cuts will be paid for by cuts in deductions’. He has never once proposed which deductions will be cut, or for whom. Will the cuts only affect the wealthy, or people lower on the income spectrum, as Martin Feldstein suggested when he was actively moving the goalposts to try make the math work.
However, all of that discussion becomes irrelevant with the introduction of an analysis from the Joint Committee on Taxation (the tax policy equivalent of the Congressional Budget Office). No matter which deductions you target, no matter how you torture the numbers, you can no make the base broadening strategy pay for a 20% tax cut (ht Mark Thoma):
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….