The Romney campaign is highlighting a 2006 Joint Committee on Taxation analysis of a tax plan that would eliminate most tax breaks while lowering tax rates to bolster its claims that the GOP presidential nominee’s plan would boost economic growth.
A Romney campaign aide said via email that the campaign is highlighting the JCT analysis, flagging a blog post by the Tax Foundation, to show how a “Romney-style tax plan” could bolster growth and not as an example of the specific tax plan Romney would seek to enact.
That JCT study predicted that revenue-neutral tax reform would increase economic growth. And the plan has similarities to Romney’s proposal. The plan studied by the committee lowered the top rate to 26.8 percent, versus 28 percent for Romney, and kept preferential rates on capital gains and dividends. Romney would keep existing rates for the highest-earning taxpayers and eliminate taxes on that investment income for taxpayers with less than $200,000 in income.
The 2006 JCT study projected 0.8 percent to 1.7 percent growth in employment and 1.1 percent to 1.9 percent growth in the gross domestic product over a decade under various models.
But the JCT plan was predicated on repealing almost every tax break in the code, including the child tax credit, the employer-provided health care exclusion and nearly every itemized deduction, including deductions for charity, mortgage interest and state and local taxes.
That goes much further than Romney has been willing to go — one reason that an analysis by the Tax Policy Center said his math doesn’t add up.
One idea Romney has proposed is enacting a cap on itemized deductions — he has floated $17,000, $25,000 or $50,000 as possible caps — rather than eliminating them entirely. The Romney campaign has also said it would look at putting a cap on the tax break for employer-provided health insurance. But it hasn’t shown specifically how Romney would raise enough revenue to avoid raising revenue from somewhere else or adding to the deficit.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.