Romney tax plan, re-refuted

Josh Barro explains, again!, why Romney’s tax plan—cutting tax rates and eliminating tax deductions (or “preferences”) without hurting regular folks like you and me—won’t work. Because it’s us regular folks who get all the tax breaks!

Tax returns reporting less than $200,000 of adjusted gross income (AGI) [that’s us folks] accounted for a total AGI of $5.86 trillion, and taxable income of $3.24 trillion. That is, deductions and exemptions amounted to 45 percent of adjusted gross income for people making under $200,000.

Tax returns with more than $200,000 of AGI (the highest-earning 2.8 percent of filers) [that’s the dressage crowd] had a total of $1.96 trillion in AGI and $1.62 trillion in taxable income. For this high-income group, deductions and exemptions were just 18 percent of adjusted gross income.

Mitt says he won’t touch the tax preferences affecting regular folks, but just eliminating the preferences for the rich won’t raise enough money to offset the losses in revenue from cutting the rates by 20 percent. Which means that, unless you start monkeying with the capital gains rate, which Mitt won’t do, because that’s his money, Mitt’s plan would either fail to raise the revenue he said it would raise or else it would make the federal income tax less progressive.

Of course, Mitt could go after the $100,000 to $200,000 crowd, seeing as they make at least twice as much as Mr. Average, but Mitt, bless his heart, can’t force himself to do that. Anyone scraping by on less than $200,000 a year has Mitt’s deepest sympathy.*

Afterwords
Bruce Bartlett explains why, even if Mitt’s plan would work, it still wouldn’t work.

*And, of course, Obama’s as well. Those folks making more than $200,000 must feel put-upon. “Shoot me, I’m successful!”