The longer the presidential campaign goes, the less specific Mitt Romney’s tax plan becomes.
The Republican nominee unveiled his current plan in February, pressured by primary-season rivals to propose something more dramatic than extensions of current policies. He called for a 20 percent cut in individual income tax rates, along with the elimination of the estate tax and alternative minimum tax.
Romney has said that he would broaden the tax base, particularly for high-income individuals, and rely on economic growth to avoid increasing the deficit or shifting the tax burden to the middle class. He has described middle income as $200,000 to $250,000 and below, and has said he wouldn’t cut taxes on the highest earners.
The candidate started coming under pressure in August when the nonpartisan Tax Policy Center released a report showing how difficult it would be to hit Romney’s target on the progressivity of the tax code while also hitting his rate and revenue targets. In other words, his 20 percent tax cut and promise of revenue neutrality was difficult or nearly impossible to achieve without shifting the tax burden to middle-income workers.
In response to the report and criticism from the Obama campaign that he would necessarily raise taxes on the middle class, Romney emphasized that his first priority would be to avoid increasing taxes on the middle class. Left unsaid: Setting progressivity as the primary goal only puts more pressure on his revenue and rate targets.
After the TPC report, studies by Romney advisers Harvey Rosen and Martin Feldstein showed that achieving Romney’s targets would be easier if deductions could be trimmed for people making between $100,000 and $200,000. And this week, campaign adviser Kevin Hassett said Romney would be willing to reduce the size of his rate cuts so his plan could add up.
What’s left now is much more of a general direction than a specific plan: Cut tax rates as much as possible, curtail deductions on top earners as much as possible, promise to avoid middle-class tax increases and figure out all the details later.