An Honest Conversation on Tax Reform
Heritage’s Curtis Dubay has published a report to rebut the Tax Policy Center’s (TPC) skewed analysis of Governor Romney’s tax plan. In the study, he explains that Romney’s plan would not cut taxes for the rich and raise taxes for middle-income and low-income taxpayers, as the TPC report falsely suggests. They come to this conclusion by a series of “carefully made choices” that bring them to their “selected result.” If the false assumptions are removed, it becomes clear that the “Romney plan makes growth-promoting policy changes in a revenue-neutral manner and does not raise taxes on middle-income and low-income taxpayers.” It would have a very positive effect on the economy, a boost this country desperately needs.
The TPC is of course not alone in slinging these false accusations. A lead voice in the liberal chorus singing President Obama’s praises and condemning Romney is former President Bill Clinton who has also accused the Romney plan of raising taxes on the middle-class. Ironically, President Obama, who depended on the TPC analysis to deride the Romney plan, has himself raised taxes on the middle-class. So is he really that concerned about taxing the middle-class? Evidence would suggest otherwise. Just look at the Obamacare taxes that will affect 3 million middle-class Americans!
Dubay outlines what a good tax reform plan would entail:
“There is broad agreement that the tax code unduly restrains the economy and that tax reform could reduce or remove some of these restraints, freeing the economy to grow faster. Proper tax reform would:
- Improve economic performance by lowering marginal tax rates and making other growth-oriented changes;
- Enact a new tax code that raises the same amount of revenue as the previous tax code (revenue neutrality);
- Broaden the tax base to achieve revenue neutrality; and
- Maintain the current distribution of the tax burden across all income levels (distributional neutrality).”
The Romney plan fulfills all of these requirements and would make “growth-enhancing changes in taxes.” The TPC study chooses to ignore the requirement for distributional neutrality in order to arrive at its false conclusions.
Tax reform is an integral part of improving the economy. Disseminating a faulty and biased tax analysis is a disservice to Americans. Lawmakers would do well to look to studies that demonstrate both the costs and the benefits of a particular tax plan, rather than one that strategically isolates and overemphasizes its costs like the TPC study. The Romney tax plan would be a step in the right direction and the kind of reform America needs to boost the economy.