Base Broadening

The Tax Policy Center released a great study today (pdf) on the distributional effects of a generic, Romney/Ryan style, revenue neutral, base broadening plan. This type of plan cuts income taxes for those in the highest tax brackets and eliminates many tax deductions that favor low and middle income households. As you can see below this type of base broadening will reduce after tax income for Americans making less than 200,000 a year (around 95% of the population).

I think it's important to note that this kind of plan probably wont happen. The tax deductions that need to be eliminated to make the income tax cuts revenue neutral are very popular with the middle class. These include the mortgage interest deduction, EITC, child tax credit, exclusion for employer-provided health insurance, and the deduction for charitable contributions. Most politicians benefit from the charitable contributions deduction and the Home Builders Association likes the mortgage interest deduction. I think if Romney wins we will end up seeing a permanent extension/reenactment of the Bush tax cuts, but no offsetting elimination of deductions.