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Posts Tagged ‘code’

After spending three weeks in Aspen as my family’s indentured servants, my parents set off on their return to New Jersey this morning.  And let me tell you, there is no more relaxing, stress-free process than preparing two 70-year olds for a day of air travel. Reminds me of this bit of genius from The Onion:

Dad Suggests Arriving At Airport 14 Hours Early

On the tax front, we here at Double Taxation are determined to keep our comparison of the presidential candidates’ tax proposals as current and accurate as possible. But it’s not always easy. For example, the staple of Mitt Romney’s plan has been the “20% across-the-board” reduction in the individual income tax rates, resulting in a decrease of the top rate from 35% to 28%.

Romney has also promised that his tax cuts won’t increase the deficit, meaning he’ll raise an offsetting amount of tax revenue elsewhere, largely through the reduction of existing deductions and preferences.

As we’ve discussed, once the math-types put these two concepts together, they revealed a couple of glaring holes, the most publicized of which was the notion that the tax rates could not be reduced while remaining revenue neutral without shifting a significant amount — $86 billion — of the tax burden from those earning in excess of $250,000 to those with income below that threshold.

While Romney’s camp continues to question the accuracy of the criticism, they’ve now got a backup plan. According to advisor Kevin Hassett, Romney would rather back off his promised tax cuts then raise taxes on the poor.

If you think the base-broadeners don’t add up, if you think he can’t get to 28 percent, then the right thing that would happen, as you know, if you’re going to have a revenue-neutral reform, is that they would have a different change in rates.

Governor Romney says he can get to 28 percent. He believes he can get to 28 percent. When he’s in office, he’ll try to do it. But if Congress won’t give him the base-broadening he needs to get to 28 percent, there’s no way in hell that anyone believes that he’s going to increase taxes by $2,000 on people with incomes below $20,000. I just can’t believe that the Obama campaign would say that, and that an economist for the Obama campaign would be up here repeating these stupid and inane talking points.

What’s the point? This goes without saying, but simplifying the tax code will not be an easy process. Most experts agree that the optimal tax system is one defined by lower rates and fewer deductions, and that is most certainly not the system we have in place today.

Romney’s proposals are a step in the right direction, but voters need to understand that such an undertaking requires flexibility. The remarks from Romney’s advisor will likely be targeted by Democrats as a sign that Romney is going back on his campaign promises, but to hold Romney to the specific points he set forth in his proposals and not afford him several alternatives to reach the desired result — revenue-neutral tax simplification that maintains the progressivity of the Code — is an unfair reaction that serves only to stand in the way of much needed tax reform.

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