Study: Analysis Shows Romney Tax Plan Mostly Benefits Wealthy Americans

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In the lead up to the November election, President Obama and Governor Romney are focusing their campaigns on battleground states, using taxes and the economy as key talking points. Both candidates are vying for the support of the middle class.

Governor Romney, speaking at a campaign event in Golden, Colo., criticized President Obama’s policies, stating that they have failed the middle class. He emphasized the importance of small businesses in creating jobs and pledged to get America working again.

The Romney campaign also released a TV ad highlighting economic struggles in Florida, ahead of President Obama’s visit to the state. The ad criticized the president for focusing on Obamacare instead of job creation.

The Obama campaign responded with their own ad, attacking Romney for paying only 14 percent of his income in taxes in 2010 and claiming that his tax reform proposal benefits the rich at the expense of the middle class.

President Obama, during an event in Orlando, Florida, accused Romney of promoting a “trickle-down tax cut fairy dust” and argued that his plan would not create jobs or benefit the middle class. He referenced a study by the nonpartisan Tax Policy Center, which concluded that Romney’s proposal would provide tax cuts for high-income households while increasing taxes for middle- and lower-income taxpayers.

However, a top Romney advisor dismissed the study as “a joke” and questioned its impartiality and methodology. The debate on tax fairness highlights the importance both campaigns have placed on appealing to middle-class voters. According to a recent NBC News/Wall Street Journal poll, President Obama has a significant lead over Romney when it comes to who would better protect the interests of the middle class.

To analyze the details of Romney’s tax proposal, Bill Gale from the Tax Policy Center and Scott Hodge from the Tax Foundation provide different perspectives. Gale explains that the center’s analysis shows a tax cut for high-income households and a tax increase for middle-income households, assuming that the revenue lost from the rate cuts would have to be made up by taxing high-income households.

Hodge, on the other hand, argues that the analysis is not technically an analysis of the Romney plan, as the details of his tax reform have not been specified. He emphasizes the progressive nature of the current income tax system, with the top 20 percent of taxpayers paying 94 percent of all income taxes. Hodge suggests that the study confirms the need for a big decision on tax reform, including whether non-payers should start paying taxes.

Gale responds by stating that the analysis is based on the options that Romney has specified, and that if he wants to finance his tax cuts with spending cuts, it would have an even more regressive effect.

The debate continues on the effectiveness of tax cuts and their impact on economic growth. The Tax Policy Center argues that revenue-neutral tax reform does not necessarily lead to significant economic growth, citing the example of the 1986 tax reform. Hodge, on the other hand, believes that the design of the tax cuts can greatly impact their outcomes and highlights the importance of cutting marginal tax rates for economic growth.

In conclusion, the analysis of Romney’s tax plan conducted by the Tax Policy Center suggests that it would primarily benefit high-income households at the expense of the middle class. However, there is debate surrounding the details of the plan and its potential economic impact. Both campaigns continue to focus on appealing to middle-class voters, as they are seen as key to winning the election.

Keywords: Romney tax plan, middle class, Tax Policy Center, Tax Foundation, tax fairness, income tax, tax reform, economic growth.

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