Romney tax plan would favor the rich

By Carl P. Leubsdorf

Republican front-runner Mitt Romney stirred some unnecessary trouble this month by seeming to dismiss the problems of poor Americans. But the truly misleading part of his comment was his suggestion that he wouldn't do much to benefit the wealthy.

Romney said his goal is to help the middle class. In fact, his tax proposals would help the wealthiest taxpayers most, and the poorest least. And they would punch a big hole in the budget, requiring massive domestic spending cuts.

"I'm not concerned about the very poor; we have a safety net there. If it needs repair, I'll fix it," Romney told CNN. "I'm not concerned about the very rich; they're doing just fine. I'm concerned about the ... 90, 95 percent of Americans who right now are struggling. ..."

Criticism of Romney focused on whether his seeming dismissal of the nation's poor made him look like an uncaring, rich businessman. Romney's supporters noted his statement that he would repair the social safety net if necessary and noted he has consistently stressed helping the middle class.

But an examination of his tax proposals shows a far different picture. Many middle-class taxpayers would benefit from his proposals to exempt those with gross incomes under $200,000 from taxes on interest, dividends, and capital gains. But just about every other major provision would mainly benefit the wealthy.

That includes maintaining the Bush tax cuts; repealing the estate tax; and eliminating tax breaks in the 2009 stimulus, such as a higher education tax credit and expansions of the child credit and earned income tax credit. He would also eliminate added taxes on wages and on high-income taxpayers' investment income under Obama's health-care law, and he would reduce the corporate tax rate.

According to the Tax Policy Center, which analyzed all the GOP candidates' plans, Romney's would cut taxes for those with incomes under $20,000 by an average of less than 1 percent, those with incomes between $75,000 and $100,000 by 3.2 percent, and those with incomes of more than $1 million by 9.3 percent.

In addition, Romney's proposals would ultimately hurt poor and middle-class people by forcing massive budget cuts to reach his goal of capping federal spending at 20 percent of gross domestic product, compared with the current 24 percent.

Analysts say that would require cuts of $500 billion in projected 2016 spending, including reductions for future Social Security and Medicare recipients, as well as in domestic programs, many of which mainly benefit low- and middle-income taxpayers. The cuts might actually be greater, since Romney wants to increase the defense budget.

If this sounds familiar, it's because it's like the budget plans enacted under George W. Bush, whose administration squandered the budget surplus Bill Clinton bequeathed and laid the groundwork for today's massive deficits.

How much of this would actually be enacted if Romney is elected is hard to say. Even if the GOP holds the House and wins the Senate, Democrats would likely have enough senators to block many proposals, much as the GOP has done over the past three years.

But there's no question that the main beneficiaries of the GOP front-runner's proposals are neither the poor nor the middle class. They're those wealthy taxpayers whom Romney said are already "doing just fine."