October 4, 2012 by David K. Sutton

The Lie: Mitt Romney Says He Doesn’t Have a $5 Trillion Tax Cut

THE LIE – During the first presidential debate of the 2012 election, Republican challenger Mitt Romney said, “I don’t have a five trillion dollar tax cut. I don’t have a tax cut of the scale that you’re [President Obama] talking about. My view is that we ought to provide tax relief to people in the middle class.”

THE TRUTH – This is a two-prong lie. First, the amount of the tax cut. Second, who gets the greatest benefit of the tax cut.

1. The amount of the tax cut.

The Tax Policy Center says that Romney’s proposed 20 percent across-the-board tax cut plan will cost $480 billion in 2015. Over 10 years that is $4.8 trillion dollars. Technically speaking Romney could be right when he says he doesn’t have a $5 trillion dollar tax cut, but $4.8 trillion over 10 years is certainly in the ballpark.

But the real reason Mitt Romney says he doesn’t have a $5 trillion tax cut is because he says his tax cut is paid for. He says he will reduce tax deductions and other tax loopholes to pay for the cost of the tax cut. The problem is he won’t say which deductions and loopholes that he will eliminate. The size of Romney’s tax cut demands the elimination of almost all deductions and loopholes from the tax code if the tax cut is to remain revenue neutral. This means eliminating things like the home mortgage interest deduction, which would result in a tax increase for many middle class Americans.

2. Who gets the greatest benefit of the tax cut.

The Tax Policy Center says under Romney’s tax plan (“ON THE DISTRIBUTIONAL EFFECTS OF BASE-BROADENING INCOME TAX REFORM – [PDF]“, Page 19) the richest 0.1% will see a whopping $264,652 tax cut. This is over 5x greater than the median income in America. Remember, this is the size of the cut, not the income level. This is definitely not a tax cut designed with the explicit purpose of providing “tax relief to people in the middle class” as Romney said.

Because Romney has provided no details on which deductions and loopholes he will eliminate, it’s safe to say that he is not being upfront with Americans. He promises a revenue neutral tax cut for all Americans but he doesn’t share what pain will be involved to keep this promise. Until Romney offers details on the deductions and loopholes he will close, his tax plan cannot be considered revenue neutral. Therefore the independent analysis done by the Tax Policy Center showing that Romney’s tax plan will cost $4.8 trillion over 10 years is the best we have to go on. It is up to Romney to fill in the blanks if he wants to prove that he doesn’t have a five trillion dollar tax cut.

— Beat that with a stick —