Presidential hopeful, Mitt Romney's tax plan would provide large tax cuts to the wealthy, while simultaneously increasing the tax burden on the lower and middle classes, according to a report produced by researchers at the Urban-Bookings Tax Policy Center.
The report illuminates just how difficult it would be to recover government revenue lost under Romney's plan, if he were to become president.
Romney's tax plan calls for 20% cuts to the current Bush-era income tax rates. He would be eliminating the Alternative Minimum Tax.
Those tax cuts could lead to a sharp decline in government revenue. However, Romney insists he would make up the difference by limiting deductions, exemptions and credits that are currently available to those earning higher wages than most.
"A revenue-neutral individual income tax change that incorporates the features Governor Romney has proposed would provide large tax cuts to high-income households, and increase the tax burdens on the middle and lower-income taxpayers," the report concludes.
According to the study, the tax cuts would produce a $360 billion revenue loss by 2015, and offsetting that would require a reduction of 65% of all available tax expenditures
As of right now, most tax breaks go to the poor and middle class.
The report also says "maintaining revenue neutrality mathematically necessitates a shift in the tax burden of at least $86 billion away from high-income taxpayers and onto lower and middle-income taxpayer."
In conclusion, workers who make less than $200,000 would actually have to pay $500 more, on average, in taxes, a 1.2% decrease in after-tax income, the study found.
After-tax workers who make more than $1 million would increase by 4.1%.
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