It's amazing to me that Mitt Romney is dissembling about the fact that his tax plan entails a significant tax cut for upper income Americans, but last night he claimed his tax cut wasn't a tax cut for the "top 5%" in a mathematically impossible way. Per the transcript (NPR link, solidarity Big Bird!):
[...] because I am not going to have people at the high end pay less than they're paying now. The top 5 percent of taxpayers will continue to pay 60 percent of the income tax the nation collects. So that'll stay the same. Middle-income people are going to get a tax break.
To understand the pernicious sophistry being used here, let's picture America as a place with 100 people, and a government that collects $100 per year, $60 of which is paid by the richest 5 of those 100, and the other $40 comes from the other 95.
Romney gets elected Mayor and implements the tax plan above, a 20% across the board tax cut, and leaves the top 5% still paying 60% of the total tax burden:
If you work out the numbers, after Romney's tax plan, the top 5 people are paying $48 in taxes, and the other 95 people are paying $32. The top 5 got a tax cut of $12, and the bottom 95 got a tax cut of $8. I'm hoping the picture makes it easier to visualize the tax burden shrinking for Romney's odd group of the top 5% (guess he can't mention the top 1% thanks to Occupy). Even if you look at the right column, it's obvious the total tax cut given to the top 5 is larger than the amount the bottom 95 get.
It's painful to try and get my head around the idea the fact that these top 5 people are still paying 60% of the village's total tax burden means they didn't just get a whopping big tax cut. It's some kind of bizzarro class-envy right wing logic where you're jealous of the "lucky duckies" on welfare and unemployment insurance because they have lower tax bills than you.
Yes, the "middle" (I grouped the poor in for simplicity but obviously the bottom 47% moochers who don't pay income taxes almost certainly get squat from Romney's tax cut) did get an $8 tax cut but basically this is a logical leap I can't really make. If I agree to treat some friends to dinner at a restaurant of their choice, obviously no matter what they pick I will be paying 100% of the cost, but does that mean I don't care financially if they pick a Michelin Star gourmet establishment or a burger joint? That seems to be what Romney is arguing here, that so long as your portion of the total societal tax burden doesn't change, you're not getting a tax cut.
I can only parse this kind of absurdity so close, and pretend to take it seriously for so long, but it needs to be picked apart because it is at the heart of the new "moderate" personna Romney unleashed at debate #1. So long as he claims that the rich will pay the same 60% of the total tax burden and the middle class gets a tax cut, that means the total tax burden must go down, and the top 5% must receive the bulk of the windfall from that reduction. Maybe the total tax burden doesn't actually fall 20%, but whatever it falls to, unless the share of the total burden the rich pay goes up (not bloodly likely), they will by simple mathematics have had to get a tax cut.
Romney is running from the fact that his tax plan must absolutely entail a substantial cut in the personal tax bill for upper income people. Someone should chase him on this.