Mitt Romney has proposed massive new tax cuts and promised to balance the federal budget. How will he achieve these seemingly contradictory goals?
For now, he isn’t saying. And, in fact, his campaign has been sending out vague and somewhat conflicting signals about where the money would come from to finance his rate cuts and other tax reductions.
When Romney rolled out his latest revenue plan on Feb. 22, senior aides were asked how he’d pay for these substantial tax reductions (the Tax Policy Center estimates they’d add $900 billion to the deficit in 2015 alone—about $400 billion from extending the 2001/2003 tax law and another $500 billion in new rate reductions and other tax cuts). Their response: Tax cuts would be funded by offsetting tax increases combined with stronger economic growth and changes in behavior driven by the tax reductions themselves.
The aides did not identify which taxes Romney would raise or estimate the economic effects of his plan. But they were clear that his tax reductions would be funded inside the revenue system. And, at least by their calculation, Romney’s new initiative would not be a net tax cut at all. It would be a classic tax reform—lowering rates while eliminating tax preferences. But it would result in no net change in tax revenues (at least as Romney measures it).
are we really going to try this again? it’s laughable when Romney tells us we can’t afford four more years of Obama, as if we can afford another round of massive tax cuts for the wealthy, a 61% increase in defense spending when we already spend more than nearly every other nation COMBINED and a promise to balance the budget without specifying what he would cut.. rather than trying to out muscle Obama by expanding the already bloated defense budget, maybe he could try honestly detailing his vision for cutting the federal budget? or just be bold enough to release as many tax returns as his father did when he ran for President…