NEW YORK (CNNMoney) — Mitt Romney’s tax plan would provide large tax cuts to the very wealthy, while increasing the tax burden on the lower and middle classes, according to a study released Wednesday.
The report — produced by researchers at the Urban-Brookings Tax Policy Center — illustrates just how difficult it would be to recoup government revenue lost under Romney’s plan.
The presumptive Republican presidential nominee’s tax plan calls for 20% cuts to today’s Bush-era income tax rates. He would also eliminate the Alternative Minimum Tax.
Those tax cuts would lead to a sharp decline in government revenue. Yet Romney insists he will make up the difference in-part by limiting deductions, exemptions and credits currently available to top-level income earners.
Romney refuses to say which tax breaks he plans to eliminate — but the Tax Policy Center report indicates the plan would force the tax burden to shift toward lower and middle-class Americans.
According to the study, the Romney tax cuts would produce a $360 billion revenue loss in 2015, and offsetting that would require a reduction of 65% of all available tax expenditures.
Such popular tax breaks include deductions for mortgage interest and state income taxes, the exclusion from income of employer-paid health insurance and lower tax rates on capital gains.
“Such a reduction by itself would be unprecedented, and would require deep reductions in many popular tax benefits,” the report said.
The end result is that individuals 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.
Lawmakers like Rep. Paul Ryan (R-WI) and Sen. Ron Wyden (D-WY) support radically restructuring the current the Medicare system into a voucher program that provides seniors with “premium support” credits to purchase coverage from an exchange of private health insurers or remain in traditional fee-for-service Medicare.
Mitt Romney, the GOP presidential candidate, has embraced the idea, which critics have long suspected would increase costs for seniors.
Under the proposal, insurance plans would submit bids for how much they would charge to provide coverage and the voucher “would be tied to the premium of the private plan with the second-lowest cost, or the premium for traditional Medicare—whichever is lower.” Critics charged that in areas where private plans make bids that are lower than the cost of traditional Medicare, seniors would see increase costs and now, a new study finds that had the plan been implemented in 2009, 24 million beneficiares enrolled in the program would have paid higher premiums to maintain their choice of plan and doctors.
On average, the GOP-backed idea would have resulted in a premium increase of $768 million each year for those 24 million seniors, accounting for 68 percent of beneficiaries.