Report says Romney, Gingrich and Perry tax plans add billions to deficit, favor the rich
The tax plans put forward by Mitt Romney, Newt Gingrich and Rick Perry would add hundreds of billions of dollars to the U.S. budget deficit, according to a series of analyses from the nonpartisan Tax Policy Center in Washington.
The latest analysis from the group, a joint venture of the Urban Institute and the Brookings Institution think tanks, found the Romney plan would lower federal revenues by $600 billion in 2015.
The finding comes from comparing Romney's proposed tax plan to current law, which mandates the expiration of the Bush-era tax cuts and other tax cuts at the end of the year. When compared to current policy, not current law, the Romney plan would lower federal revenues by $180 billion, the group found.
Among Romney's proposals are to extend the Bush-era tax cuts, repeal the federal estate tax and reduce the corporate income tax rate from 35 to 25 percent.
According to the Tax Policy Center, the tax cuts in Romney's plan go disproportionately to the highest earners. Those making more than $1 million would see an average tax cut of more than $295,000, while those making less than $40,000 would see an average tax cut of less than $1,000.
Those making less than $75,000 per year would see their average federal tax rate decrease by less than 3 percent; those making more than $1 million would see an average decrease of more than 9 percent.
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Gingrich's plan, which includes an optional, 15 percent flat tax and a larger cut in the corporate income tax rate, would expand the federal debt even more, according to the Tax Policy Center, reducing revenues by $1.28 trillion in 2015 compared to current law. (That figure is $830 billion when compared to current policy.)
Under Gingrich's plan, if those for whom it makes economic sense choose the flat tax plan and the rest stay in the current system, those making more than $1 million would see an average tax cut of more than $750,000, according to the center - an average cut of more than 24 percent in their federal tax rate. Those making less than $75,000 would see an average reduction of less than five percentage points.
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Perry's plan, which also includes an optional flat tax (his at 20 percent) would lower federal revenues by $995 billion in 2015 compared to current law, according to the Tax Policy Center - a 27 percent cut in total projected revenue. (The figure is $570 billion when compared to current policy.)
The group found Perry's plan also favors high earners, giving those making over $1 million an average tax cut of nearly $650,000 and reducing their average federal tax rate more than 20 percent. Those making less than $75,000 would see their average federal tax rate fall by less than 3 percent.
The Tax Policy Center has not completed analyses for the other candidates still in the race. The candidates whose plans have been studied dispute the findings, arguing that the tax cuts will have a simulative effect and thus increase revenue in ways not acknowledged in the analysis.
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