Austan Goolsbee, who formerly served as the Chairman of the Council of Economic Advisers in the Obama Administration, spilled some of the beans on the budget nonsense in a recent WSJ op-ed.
On the Romney budget, Goolsbee wrote:
Researchers for the Tax Policy Center, a project of Brookings and the Urban Institute, found that Romney's plan would cut taxes for individuals by about $4 trillion over the next 10 years, on top of the costs of extending the Bush tax cuts, by cutting rates by 20%, abolishing the estate tax, and abolishing the Alternative Minimum Tax, among other things.
But here is the kicker:
For high-income people, that lost revenue exceeds the value of all the relevant deductions and exemptions in the tax code combined—charitable giving, mortgage interest, state and local taxes, health insurance not counting as taxable income, etc. So to keep the deficit from increasing, middle-class tax increases are inevitable.About the Bowles-Simpson commission plan that Obama has said positive things about, Goolsbee tells us:
... the National Commission on Fiscal Responsibility and Reform proposed to cut top rates and broaden the base by eliminating deductions and exemptions as Mr. Romney says he wants to do. But the commission did it to raise $1 trillion of tax revenue as part of a $4 trillion "grand bargain" for deficit reduction.
The commission explicitly capped or eliminated every itemized deduction in the code and showed how impossible it would be to cut tax rates if you weren't willing to go after all such deductions....The commission recognized that without new revenue, a grand bargain won't work. The spending cuts would need to be too severe to keep people unified in supporting it.
Bottom line: When these D.C. characters talk about "tax cuts" and "fairer" tax plans, they are really talking about "tax shifts". It's a shell game. Government spending is not going to be cut with any of these plans, the cuts are all discussed against upward trending baseline (another scam) and when all the tax shifting is done, your taxes will be higher not lower---unless you are a billionaire who can afford to pay lobbyists who can cook up new loopholes for you..