RELEASE: Mitt Romney Would Give Himself a $4.5 Million Annual Tax Cut, Raising Taxes on 18 Million Households
CAP Action Report Investigates the Specific Consequences of Romneynomics
Contact: Katie Peters
Washington, D.C. — At the kickoff event of “Romney University” today, the Center for American Progress Action Fund released "The Romney Economic Agenda and Its Effect on the Middle Class and Growth," a new report that unpacks the true costs of Republican presidential nominee and former Massachusetts Gov. Mitt Romney’s economic proposals. The paper illustrates how Gov. Romney would take the Bush administration’s failed trickle-down economic strategy to the next level and provides details on exactly how these proposals ultimately provide Gov. Romney personally with a $4.5 million tax break, cushion and enrich the 1 percent, and raise taxes on 18 million working and middle class families.
“Mitt Romney has the same economic plan as George W. Bush,” said former Ohio Gov. Ted Strickland, who keynoted today’s event. “Trickle-down economics didn’t work then and it won’t work now. Instead of creating an economy that works for everyone, Romney wants to keep the game rigged for the rich and leave everyone else on their own. The Center for American Progress Action Fund’s analysis shows Mitt Romney’s policies work great for the rich but not for anyone else.”
CAP Action’s new analysis outlines the consequences of Gov. Romney’s startling tax blueprint, which would add a massive tax cut—one that exceeds even the size of the Bush era cuts—to a permanent extension of the Bush tax cuts. As a result, on top of the $140,000 average tax cut that millionaires receive annually thanks to the Bush tax cuts, they would receive an additional average annual tax cut of $250,000.
Furthermore, according to the analysis, under a Romney presidency, Gov. Romney himself would receive a staggering $4.5 million tax cut annually, thanks to a range of his own tax policies—including protecting the “carried interest” loophole for money managers, retaining Bush rates on investments, and repealing Obamacare. Further, if Gov. Romney were to follow through on his pledge to abolish the estate tax, he would reward himself with another $85 million to $112 million in tax breaks.
Gov. Romney combines these extreme tax breaks with a promise to keep overall revenue levels at their current levels. To accomplish this feat, Gov. Romney would inevitably raise taxes on the middle class, and the contradictory promises would make it all but impossible to adequately invest infrastructure, education, and a strong middle class. Aware of this dilemma, Gov. Romney has provided nothing but abstract spending promises. Yet as vague as his proposals to cap federal spending at 20 percent of gross domestic product and to pass a balanced budget amendment may be, the effects will be specific and will be borne by the middle class and low-income families. The specific effects of matching up a massive tax cut for the wealthy with a promise of revenue neutrality include:
- Forced cuts of $430 billion from the federal budget in a single year, a move which would undoubtedly throw the country into a depression
- 14 percent across-the-board cuts to the nondefense budget, meaning that almost $1 out of every $7 in federal spending on Social Security, Medicare, Medicaid, the safety net, and investments in infrastructure, education, science, and health research would be slashed
- If Gov. Romney were to stick by his promise to exempt Social Security, Medicare, and defense spending from cuts, cuts to basic building blocks of a successful, modern economy such as education, infrastructure, and basic scientific research could reach 30 percent
- A $1.5 trillion budget deficit by 2016, or 8 percent of GDP, which is nearly $1 trillion more than the deficit forecasted under President Barack Obama’s budget proposals
- $9.6 trillion in higher debt between 2013 and 2022 than would incur under President Obama’s plan
- Romney’s New Tax Incentive for Outsourcing U.S. Jobs by Seth Hanlon
- Romney Tax Plan: Many Happy Returns for Big Oil by Daniel J. Weiss
Learn more about Romney U:
- Follow Romney U on Twitter at #RomneyU
- Watch streaming video of the event (happening today, July 31, 9:30 a.m. to 2:30 p.m.)
- Download additional reports and resources
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