RELEASE: Romney’s tax hikes on middle class $1 trillion larger than previously thought after campaign clarification on corporate tax breaks
Contact: Madeline Meth
Washington, D.C.— A little-noticed clarification from the Romney campaign to the Tax Policy Center last week contained a stunning detail: Not only will middle class families have to pay for Romney’s massive tax breaks on the rich—they’ll also have to pay for Romney’s $1 trillion in proposed corporate tax cuts. In the original Tax Policy Center analysis that caused such a stir, the analysts assumed Romney would “pay for” his proposed reduction in corporate tax rates by closing corporate tax loopholes. Not so, accord ting to the Romney campaign clarification published last week.
That means the only way Romney can lower corporate tax rates from 35 percent to 25 percent, if he means to keep his promise of “revenue neutrality,” is to raise taxes even more on the middle class.
In a new column, Seth Hanlon of the Center for American Progress Action Fund walks through the implications of these revelations and exactly what it means for middle class families. Romney’s plan to give corporations a $1 trillion tax cut and an $80 billion tax holiday before asking them to sacrifice a single tax break and found that the consequences of the Romney-Ryan plan include:
- Shifting, in a single year, roughly $86 billion in tax burden from wealthy Americans making $200,000 a year to those making less
- A tax increase for a middle class family that could be closer to around $4,000, rather than the $2,000 originally estimated by the Tax Policy Center because of the campaign’s latest clarification that none of the cost cutting corporate taxes would be paid for by eliminating corporate tax breaks
Even under extremely optimistic estimates Gov. Romney’s tax rate cuts would not come close to paying for themselves: Middle-class families would still get a significant tax increase, albeit a smaller one. Cuts in corporate tax rates are estimated to have a similarly small impact on economic growth—not nearly enough to finance themselves.
The bottom line is this—Gov. Romney’s tax plan raises middle-class families’ taxes to pay for tax cuts for high-income households, and now we know that it will raise middle-class families’ taxes even more to pay for tax cuts for corporations.
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