Under current policy signed into law by President Obama, the average American family will see its tax bill rise by almost $3,500 starting Jan. 1. But according to Obama, it's Mitt Romney who wants to raise taxes on the middle class.
"To pay for huge tax breaks for millionaires like him, Romney would have to raise taxes on the middle class -- $2,000 for a family with children, says a nonpartisan report," a recent Obama television ad claims. Don't believe it, because it isn't true.
The "nonpartisan" report Obama refers to came out in August from the left-wing Tax Policy Center, or TPC, purporting to show that Romney would have to eliminate $86 billion in middle-class tax breaks to pay for his 20 percent across-the-board rate reduction.
Its authors -- one of whom is a recent Obama employee -- have subsequently admitted that in the absence of details about Romney's tax plan, they simply made them up. They also admitted their numbers came out wrong because they guessed which tax breaks Romney would eliminate and which ones were "off the table." But what if Romney had other ideas and eliminated, say, exclusions for state and local bonds and life insurance products? Presto: The tax gap would instantly fall from $86 billion to $41 billion.
The TPC study also assumed Obamacare would not be repealed. But if Romney wins the election, repeals Obamacare's tax hikes and pays for it with Obamacare spending reductions, that would free up an additional $29 billion.
That brings the gap down to just $12 billion, which could easily be made up by limiting itemized deductions for high-earners or phasing out their exemptions. Romney has often said he would be open to this. And he might not even have to do it -- so far, this analysis assumes economic growth does nothing to close the gap, and that other revenue-raisers, such as oil and gas leases, are not expanded in a Romney administration.
Only one candidate in this presidential race has a plan guaranteed to raise taxes, and that's Obama. His own legislative affairs director, Rob Nabors, told Democratic senators during the debt limit debate last year, "You could raise all the taxes you want on millionaires ... and it would never raise enough."
In other words, the $3,500 tax hike Obama will inflict on Americans this January is just a start.