Third time’s a charm? In light of the most recent round of presidential sparring, the Tax Policy Center has re-re-checked their calculations, trying to discern whether Romney’s tax plan is actually revenue-neutral. Their conclusion? It still won’t work. Romney’s grand suggestion on Tuesday was to pay for his tax reductions through capping itemized deductions at $25,000, up from $17,000, an amount he previously put forward. But TPC countered:
But higher caps would impose proportionally more of the tax increase on higher-income households, as new TPC estimates show. With tax rates 20 percent below today’s rates, about 83 percent of the revenue gain in 2015 from a $17,000 cap would fall on the top quintile and about 40 percent on the top 1 percent. Raising the cap to $25,000 would boost those shares to nearly 90 percent on the top quintile and fully half on the top 1 percent. A $50,000 cap would virtually exempt the bottom four quintiles from higher taxes: less than 4 percent of the tax increase would fall on them, while nearly 80 percent would hit the top 1 percent.
…these new estimates suggest that Romney will need to do much more than capping itemized deductions to pay for the roughly $5 trillion in rate cuts and other tax benefits he has proposed.