Leading up to the November election, 7NEWS and TheDenverChannel.com will check the accuracy of political ads.
"Truth Tracker," is based on the following scale:
- Mostly True
- Mostly False
AD (Romney at Presidential Debate): "I'm not in favor of a $5 trillion tax cut. That's not my plan."
AD (NBC Reporter Andrea Mitchell): "The non-partisan tax policy center concluded that Mitt Romney's tax plan would cost $4.8 trillion over 10 years."
TRUTH TRACKER: The statistic from Andrea Mitchell is MOSTLY TRUE but it's MISLEADING because it's based on incomplete data.
Four times during the first Presidential Debate in Denver, President Obama mentioned that Romney had an economic plan with a $5 trillion tax cut. Four times, Romney fought against that assertion.
According to Romney's campaign website, his tax plan includes:
- Make permanent, across-the-board 20 percent cut in marginal rates
- Maintain current tax rates on interest, dividends, and capital gains
- Eliminate taxes for taxpayers with AGI below $200,000 on interest, dividends, and capital gains
- Eliminate the Death Tax
- Repeal the Alternative Minimum Tax (AMT)
Using that information as a baseline, the non-partisan Tax Policy Center, calculated what those types of cuts would mean for government revenue.
The report from August 1, 2012 determined that by the year 2015, when those tax changes would be in full effect, government revenue would be reduced $456 billion. When multiplied over 10 years, that equals $4.5 trillion. (*The report originally determined $480 billion per year, to get to the $4.8 trillion referenced by Andrea Mitchell in the ad, it has since been revised).
The Tax Policy Center is only able to estimate half of the equation. Romney has said he plans to eliminate tax exemptions and deductions which would offset the revenue loss, but he has yet to give specifics on what or how.
AD: "Why won't Mitt Romney level with us about his tax plan which gives the wealthy huge new tax breaks? Because according to experts, he'd have to raise taxes on the middle class or increase the deficit to pay for it."
TRUTH TRACKER: MISLEADING
Without specific information from the Romney tax plan, the Tax Policy Center made assumptions and estimated how much revenue would increase with the elimination of certain deductions and exemptions.
It also extrapolated what that would mean for different tax brackets.
It determined that households making more than $200,000 would see an increase in after-tax income. It determined that households making less than $200,000 would see a decrease in after-tax income.
Since Romney has not offered any specifics on what tax deductions and exemptions would be eliminated, any data from the Tax Policy Center is simply a "best guess."
While it's possible this claim could eventually be determined TRUE or FALSE, it's MISLEADING until we get more specifics from Romney and can accurately calculate the math.