Media outlets including the Associated Press and CNN are holding President Obama accountable for Mitt Romney's failure to lay out how he will pay for $5 trillion in tax cuts. But independent analysts have estimated that Romney's proposal would cut taxes by $5 trillion, with no specific plan to replace that revenue.
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Media Criticize Obama For Claiming In Presidential Debate That Romney's Tax Plan Will Cut Taxes By $5 Trillion
AP: Obama's Claim That Romney Wants To Cut Taxes By $5 Trillion "Doesn't Add Up." The Associated Press claimed that "Obama's claim that Romney wants to cut taxes by $5 trillion doesn't add up," explaining:
Presumably, Obama was talking about the effect of Romney's tax plan over 10 years, which is common in Washington. But Obama's math doesn't take into account Romney's entire plan.
However, Romney says he wants to pay for the tax cuts by reducing or eliminating tax credits, deductions and exemptions. The goal is a simpler tax code that raises the same amount of money as the current system but does it in a more efficient manner.
The knock on Romney's plan, which Obama accurately cited, is that Romney has refused to say which tax breaks he would eliminate to pay for the lower rates. [Associated Press via The Huffington Post, 10/3/12]
ABC News: "Obama Is Not Accurate" In $5 Trillion Tax Cut Claim. ABC News senior political correspondent Jonathan Karl wrote that Obama's claim is "not correct." He continued:
Obama is not accurate when he says Romney's plan will add $5 trillion to the deficit. Romney has said his tax plan will be revenue neutral. Romney has not provided the details on how he will pay for his tax rate cut, but that does not mean the President can make the details up for him.
This claim would be Mostly Fiction. [ABC News, Otus, 10/3/12]
CNN's Berman: If Romney Closes Loopholes, Obama's Claim "Would Be False." During CNN's Early Start, co-host John Berman claimed that Obama's assertion that Romney's tax plan would cut taxes by $5 trillion was false because Romney promised to close loopholes and get rid of deductions. From the broadcast:
BERMAN: So let's look at the facts here. Mitt Romney does propose across the board, 20% tax cuts. The nonpartisan Tax Policy Center says that under his plan, taxes on the wealthiest American would be reduced by $5 trillion. But Mitt Romney says he would offset these cuts by closing some deductions, closing loopholes. This would reduce the net tax cut for the wealthy. So our verdict here is if Mitt Romney does reduce some of these loopholes, then president Obama's claim that Romney's giving a $5 trillion tax cut, that would be false. But, here's the issue, Mitt Romney was vague. [CNN, Early Start, 10/4/12]
In Fact, Romney's Plan Specifically Outlines Tax Cuts of $5 Trillion...
Tax Policy Center: Romney's Tax Plan Would Result In Deficits Of Nearly $5 Trillion Over 10 Years. In a March 1 report, the Tax Policy Center (TPC) found that without closing any loopholes, Romney's tax plan would cut taxes by $480 billion annually or about $5 trillion over the next decade:
Because Gov. Romney has not specified how he would increase the tax base, it is impossible to determine how the plan would affect federal tax revenues or the distribution of the tax burden. TPC has analyzed instead the effects of the specified proposals in the Romney plan. These estimates provide a guide as to how much the base broadening would need to raise taxes in different income groups to achieve the plan's targets.
[I]n the absence of such base broadening, TPC estimates that on a static basis, the Romney plan would lower federal tax liability by about $900 billion in calendar year 2015 compared with current law, roughly a 24 percent cut in total projected revenue. Relative to a current policy baseline, the reduction in liability would be about $480 billion in calendar year 2015. [The Tax Policy Center, 3/1/12]
Without Explaining Which Loopholes He Would Close To Make Up For Lost Revenue
FactCheck.org: "Romney Has Steadfastly Refused To Say Which Tax Preferences Would Be Cut Or Reduced." FactCheck.org explained that while Romney's tax plan lays out the specific taxes it would cut, it fails to lay out how it would offset the cuts. Factcheck.org concluded that Romney's tax plan was simply not possible, unless he raised taxes on capital gains. From the article:
Romney has said he would offset the loss of personal income tax revenue (estimated at $360 billion a year by the Tax Policy Center) by reducing tax deductions and credits. And he has said he would do this while making sure that those at the top keep paying the "same share of the tax burden they're paying now."
But he has steadfastly refused to say which tax preferences would be cut or reduced. He has pointed to the revenue-neutral proposals for rate-cutting put forth by the deficit commission as evidence that what he proposes is possible in theory, but those proposals pay for the cuts largely by taxing capital gains at the higher rates that apply to ordinary income, a measure Romney has specifically ruled out.
So Romney has failed to produce evidence that what he promises is possible. And we judge that the weight of evidence and expert opinion is clear -- it's not possible. [FactCheck.org, 8/3/12]
NPR: "For Now, Tax Analysts And Voters Will Just Have To Keep Guessing About How Romney's Plan Would Work." National Public Radio's Morning Edition reported on the lack of specificity in Romney's tax plan, explaining:
Romney says it is possible to cut tax rates without driving the government deeper into the red, and that he can make up for the lost revenue by closing tax loopholes. But analysts have had a hard time testing Romney's claim because he hasn't offered many specifics.
For now, tax analysts and voters will just have to keep guessing about how Romney's plan would work, and decide whether they trust the candidate to fill in the details after the election. [NPR, Morning Edition, 9/11/12]
Independent Fact-Checkers Agree That Romney's Tax Plan Doesn't Add Up
Bloomberg: "Romney's Tax Plan Can't Add Up Under Congressional Budget-Scoring Rules." Bloomberg concluded that Romney's plan won't add up. From the article:
Congressional budget-scoring rules are conservative about anticipated growth from tax cuts because economists disagree over how much they spur the economy. If Romney's plan goes to Congress, where those rules apply, it wouldn't add up. [Bloomberg Businessweek, 10/4/12]
Wash. Post's Ezra Klein: "I Can Describe Mitt Romney's Tax Policy Promises In Two Words: Mathematically Impossible." In a Bloomberg View column, Washington Post columnist Ezra Klein wrote, "I can describe Mitt Romney's tax policy promises in two words: mathematically impossible." He continued, explaining how the Tax Policy Center analyzed Romney's proposal:
To help Romney, the center did so under the most favorable conditions, which also happen to be wildly unrealistic. The analysts assumed that any cuts to deductions or loopholes would begin with top earners, and that no one earning less than $200,000 would have their deductions reduced until all those earning more than $200,000 had lost all of their deductions and tax preferences first. They assumed, as Romney has promised, that the reforms would spare the portions of the tax code that privilege saving and investment. They even ran a simulation in which they used a model developed, in part, by Greg Mankiw, one of Romney's economic advisers, that posits "implausibly large growth effects" from tax cuts.
The numbers never worked out. No matter how hard the Tax Policy Center labored to make Romney's promises add up, every simulation ended the same way: with a tax increase on the middle class. The tax cuts Romney is offering to the rich are simply larger than the size of the (non-investment) deductions and loopholes that exist for the rich. That's why it's "mathematically impossible" for Romney's plan to produce anything but a tax increase on the middle class. [Bloomberg View, 8/2/12]