This is a paper that was published Aug. 1 by the Urban Brookings Tax Policy Center. It is an analysis of what would happen if the tax reforms proposed by Governor Mitt Romney's campaign were implemented.
It's a little dense, but not too difficult to get the gist of. The abstract of the paper reads thus: "This paper examines the tradeoffs among three competing goals that are inherent in a revenue-neutral income tax reform- maintaning tax revenues, ensuring a progressive tax system, and lowering marginal tax rates- drawing on the example of the tax policies advanced in presidential candidate Mitt Romney's tax plan. Our major conclusion is that any revenue-neutral individual income tax change that incorporates the features Governor Romney has proposed would provide large tax cuts to high-income households, and increase the tax burdens on middle and/or lower income households."
The Brookings Institute actually went one step farther than Mitt Romney because they tried to offset the tax cuts, whereas Romney has given no specifications as to how he will make up for the 465 billion in revenue the United States Government will be losing due to tax cuts. They illustrate how it is impossible to offset the revenue loss by taking away tax incentives, and how the burden for the revenue that would be offset is primarily on families with an income below $200,000. Think about a 1 percent tax decrease on 1 million dollars. That's $10,000 back in somebody's pocket as opposed to being sent to the government as a tax. That same 1 percent cut on 50,000 dollars is only $500 away from the government and back in a citizen's pocket.
Most of the revenue being lost by the government under Romney-type cuts is from people in extremely high tax brackets. However, the type of tax incentives that could conceivably be cut save people with a lower income a lot more money than people in high-income brackets, at least proportionally speaking, so people in lower tax brackets would be picking up the slack for people in higher brackets. This doesn't really make sense. So, best case scenario, Romney actually does something to offset the revenue decrease his cuts would create, and the little guy still suffers.
As I mentioned before, the actual scenario as of right now is a $465 billion loss with a promise of some plan that does something to generate $465 billion. I'm going to assume the loss until I actually see a plan that tells me otherwise. In this case, everybody pays less taxes, and again the people in high-income brackets get way more money back because 1 percent of a lot is much larger than 1 percent of a little. I'm also going to assume that if the government loses 465 billion dollars it won't be able to pay for as many things. I think that if the government couldn't pay for as many services as it used to, the poorer people would again suffer more than the rich people.
There is also a common conservative view that cutting government spending and programs would be the way to offset the lost revenue. I feel like cutting spending on things like welfare or even education would still disproportionately hurt people with lower incomes as opposed to people who make more money.
The only people who realistically have a reason to support Romney's tax plan are rich people. All rhetoric and political posturing aside, his tax plan will make the rich people richer and put more of a burden on poor people, and the United States' already debt-ridden government. So, I don't care than Ann Romney isn't an average housewife, or that Mitt Romney owns lovely white horses. You can even put aside however Mitt Romney feels about abortion, or LGBT rights, or any hot button social issue. He is basically running on this financial platform above everything else, and it's bad enough to keep me from supporting Romney regardless of his stance on anything else.