Sen. Toomey's tax plan raises questions that provoke his wrath over math

The federal budget and the tax system that keeps it viable, more or less, are painfully complicated, so misunderstandings are understandable.

On Tuesday, U.S. Sen. Pat Toomey, R-Pa. and the Lehigh Valley's pride and joy, rebuked CNN's Soledad O'Brien when she asked some impertinent questions based on a report by the Center on Budget and Policy Priorities.

The CBPP is viewed as a leftist outfit by the millionaire-billionaire caucus in Congress, of which Toomey is a member in good standing.

The CBPP said that Toomey's much heralded (by Republicans) budget plan last year would raise taxes for people making less than $200,000 a year, while drastically reducing taxes paid by the very wealthy. When O'Brien tried to ask him about that, he angrily cut her off in midsentence.

"Now, wait a minute," Toomey interrupted. "I got to stop though, because that's factually ridiculous … factually wrong and ridiculous and not close."

He said his plan would simplify the tax code and would increase revenue by getting rid of some deductions and loopholes.

Last June, Toomey wrote an opinion column published by The Morning Call that called for a federal budget with the tax rate for wealthy Americans (those making over $379,150 a year) cut from 35 percent to 25 percent. He and some fellow Republicans later modified the proposal to make it 28 percent.

When I wrote about the Toomey plan a few days later, I noted that in the 1950s under Dwight Eisenhower (a Republican and my favorite contemporary president), the tax rate for the rich went as high as 92 percent and the nation prospered anyhow.

By the advent of Ronald Reagan, it was slashed to 28 percent. It later went up to 35 percent, but got slashed again by George W. Bush. I also said that two-thirds of America's wealth is in the hands of only 5 percent of its people, and that lopsided ratio keeps getting more lopsided all the time.

CBPP's November report said Toomey's plan, ostensibly designed to help reduce the federal deficit, could not do so with lower taxes for the rich unless somebody else gets socked with a bigger share of the burden.

Since last June, Toomey has not been shy about taking credit for single-handedly cooking up such a tax cut plan, to help save America from deficit doom.

That sounded great, but some of us are having trouble with the math. How do we subtract billions from the revenue provided by millionaires and billionaires at the same time we add billions to a deficit-reduction plan, unless the money comes from elsewhere? Will it be some sort of trickle-down miracle such as that promised by Reagan?

Meanwhile, with Toomey saying he also favors across-the-board tax reductions for everybody, some of us are even more confused about the math.

I could not figure out how to dismiss the rascally CBPP's suspicions that somebody other than the rich would wind up with the burden of deficit reduction under Toomey's plan. So I contacted Toomey's office to get the cold hard facts he had furiously accused O'Brien of ignoring, and was asked to submit my questions in writing. I did — five paragraphs of them, asking for a copy of the written version of Toomey's plan, figures on what it would mean in actual tax rates paid by individuals, and a precise explanation of where the CBPP got its facts wrong.

"Can you give me specific figures that refute the CBPP claims, focusing on individual taxpayers at various income levels and what they would pay under Sen. Toomey's plan?" my letter concluded.

Toomey's press spokeswoman, Rebecca Neal, responded with a single paragraph:

"The CBPP's analysis of Sen. Toomey's proposal during the Joint Select Committee on Deficit Reduction negotiations is fundamentally flawed because it is based on an analysis of a different proposal from another lawmaker. Due to this major oversight, CBPP's characterizations of Sen. Toomey's proposal are inaccurate and inappropriate," she wrote.

Another lawmaker? Who? Dozens of news stories have focused on Toomey for almost single-handedly advancing the cut-taxes-for-the-rich approach since last June.

The day after I received the non-answer from Toomey's office, when it came to pointed particulars, the CBPP issued another statement, pointing out that Toomey's plan would cut taxes for the rich to levels even below those that resulted in crippling deficits during the George W. Bush era.

If, as Toomey claimed, the plan would increase revenue by $290 billion to help deal with the deficit, and if the taxes of the rich drop from 35 percent to 28 percent, the CBPP deduced that the $290 billion has to come from somewhere. "The math is irrefutable," Thursday's report said. "If the [Toomey] tax plan is supposed to produce a net increase in revenues, and if it loses revenue from people making over $200,000, then it simply must raise revenue from people making less than $200,000."

Rascally leftist outfit or not, that logic is a little hard to challenge.

By the way, the previous CBPP report, which angered Toomey in the CNN interview, relied in part on statistics provided by the Brookings Institution, a nonpartisan think tank. It said that by 2015, a uniform 20 percent cut in tax rates, as separately proffered by Toomey, would result in a change of less than 2 percent for Americans making less than $75,000 a year, while those making more than $1 million would see a change of more than 4 percent.

In other words, if you make $75,000 or less, the most you'd see is a benefit of around $1,500. If you make over $1 million, your benefit would be twice as sweet, on a percentage basis, or more than $40,000 in extra pocket money for each $1 million of income you have annually.

Seems fair.

paul.carpenter@mcall.com 610-820-6176

Paul Carpenter's commentary appears Sundays, Wednesdays and Fridays.

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