Can you supply a link for your assertion?
Reagan cut the rates and, let me clearly state, cut the base for major taxes. This is not the policy of Mr. Romney, who may be cutting the standard deduction, mortgage interest and raising other rates and bases.
Agreed. The table at this link shows that the 1986 tax cut was revenue-neutral over 4 years, at least according to a Treasury document. Romney's tax plan doesn't even come close. I looked closely at one of the key studies that supposedly supports his plan. Following is a fully sourced table that looks at Romney's tax plan using 2009 IRS tax data:
Projected Revenue Gain/Loss from Romney Tax Plan
(billions of dollars)
2009 IRS Data Feldstein
======================= ===============
Adjusted Gross Income --> All 100K+ 200K+ All 100K+
========================= ======= ======= ======= ======= =======
Income tax before credits 976 682 449 953
Dividends & capital gains 49* 49*
------------------------- ------- ------- ------- -------
Tax affected by rate cut 927 904
Revenue loss of 20% cut 185 181
Alternative minimum tax 23 23
Investing tax cut 15* 15*
------------------------- ------- ------- ------- -------
Static revenue loss 223 219
Dynamic revenue loss 190* 186*
========================= ======= ======= ======= ======= =======
Home mortgage interest 421 199 67
State and local taxes 252 184 113
Real estate taxes 168 88 36
Contributions deduction 158 99 59
Other itemized deductions 206 67 30
------------------------- ------- ------- -------
Total itemized deductions 1,204 637 305 636
Revenue gain at 30% 191 91 191
Revenue gain at 25%|27% 159 82 159
=================================================================
Note: following are estimates of revenue loss not included above:
-----------------------------------------------------------------
Estate tax elimination 21*
Phase in of deduction loss 15*
=================================================================
* estimated by Feldstein (else 2009 IRS data)
Sources: 2009 IRS Tax Data, Table 1.4, Sources of Income, Adjustments, and Tax Items
2009 IRS Tax Data, Table 2.1, Sources of Income, Adjustments, Itemized Deductions
Martin Feldstein's Wall Street Journal article, August 28, 2012
Martin Feldstein's blog post, September 02, 2012
You can find an analysis of the numbers at this link. As the table and analysis show, it does not appear to be mathematically possible, much less politically possible, to pay for the Romney tax cuts by cutting deductions without raising taxes on the middle-class, something that Romney has pledged not to do.The 1986 reforms were designed to be revenue neutral but there was a modest short run loss in revenue ( about $10 billion, I recall) attributed to the reform. The Reagan reform did not cut the base for major sources of federal tax revenue (personal and corporate income). Many deductions and credits were eliminated or capped, and the result was a major simplification of the tax code for most of us. However, the special interests squealed and Congress subsequently unravelled many of the simplifications. A good book on the subject is Showdown at Gucci Gulch by Jeff Birnbaum and Alan Murray.