The Wall Street Journal hones in on the big assumption in the Tax Policy Center study that’s driven much of the media coverage and Democratic attacks against Mitt Romney’s tax plan:
The study’s biggest distortion is its raw assertion that Mr. Romney would refuse to close certain loopholes. In the appendix, the Tax Policy Center lists, among others, two giant tax deductions that it says would go untouched: the exclusion of interest on tax-exempt municipal bonds, and the exclusion of interest on life insurance savings. The study claims that Mr. Romney won’t close these because they are incentives for saving and investment.
One problem: Nowhere do Mitt Romney or his advisers say that these deductions can’t be touched. Senior economic adviser Glenn Hubbard says these deductions are definitely “on the table.”
This is the assumption that TPC’s study was based on, despite prior comments from Romney that indicate these deductions and exclusions could still be on the table (and the latest clarification from the Romney campaign they actually are on the table).
As John Steele Gordon noted during the weekend, Democrats have been pummeling Mitt Romney about his tax plan, after a new study by the Tax Policy Center claimed it would raise taxes on the middle class. The latest dig came from President Obama, who called the plan “Robin Hood in reverse”:
“The entire centerpiece” of Romney’s economic plan is a $5 trillion tax cut, he said.
The president spoke of the Tax Policy Center’s analysis of Romney’s plan again. “It’s like Robin Hood in reverse — it’s Romney-hood.”
The crowd laughed and roared and whistled its approval.
“That’s the choice in this election. That’s why I’m running for a second term as president.”
I was planning to write about the analysis of Romney’s tax plan by the Tax Policy Center that Democrats have been using to beat up on the Republican nominee this week. But now I don’t have to. Jennifer Rubin at the Washington Post has done it for me. And done it very well.
As Jen explains, the Romney plan was no more than an outline of how he would reform taxes to make them broader, with compensating lower rates. The left-of-center Tax Policy Center, with little specific to work with, then made some very convenient assumptions that allowed them—and delighted Democrats—to say that Romney’s plan would involve tax increases for the middle class while the rich would, as always in Republican tax proposals, get away with not paying their fair share.