* Romney tax plan cuts 20 percent for all income groups
* Those making over $1 million benefit most under plan
* Romney hasn't spelled out how to fund tax cuts
By Kim Dixon
WASHINGTON, Aug 1 Republican U.S. presidential
challenger Mitt Romney's proposal to slash individual income
taxes by 20 percent across-the-board would primarily boost the
income of the wealthiest taxpayers, according to a nonpartisan
analysis released on Wednesday.
The report by the centrist Tax Policy Center found that
Romney's tax cuts would boost after-tax income by an average of
4.1 percent for those earning more than $1 million a year, while
reducing by an average of 1.2 percent the after-tax income of
individuals earning less than $200,000.
Tax policy and how to tame the U.S. government's budget
deficit, topping $1 trillion in recent years, is a major point
of contrast in the presidential race, in which Romney will face
President Barack Obama on Nov. 6.
Romney, a multi-millionaire who made his fortune at private
equity firm Bain Capital, has not spelled out how he would lower
marginal tax rates. But he has said broadly he would cut some
tax benefits for the wealthy.
Because the value of the 20 percent tax cut for richer
Americans would exceed the gains they get from popular tax
breaks that Romney would chop, they would see the greatest
income gain from Romney's possible changes, the study said.
"We add up how much people get from the tax cuts and then
add up how much can be potentially be raised," from ending tax
breaks, said Adam Looney, an economist and one of the study's
About two-thirds of the $1.1 trillion in revenues that the
government foregoes annually because of tax breaks would have to
be curbed to fund Romney's tax cut, the analysts said.
These tax breaks include popular ones such as the mortgage
interest deduction, the break for employer-provided health
insurance, and credits for low- and middle-income families.
The analysis assumed elimination of tax breaks would start
with the wealthy as Romney has suggested, and it assumed some
revenue growth from lower tax rates, a hallmark of Republican
Obama has blasted Romney's tax plan for disproportionately
benefiting the wealthy.
The tax policy debate is expected to intensify at the end of
2012, with the expiration of lower tax rates for all Americans
enacted under Republican President George W. Bush.
The Democratic-led Senate last week passed legislation
extending most of those tax rates - but not for households
earning more than $250,000 a year.
The Republican-led House of Representatives will likely pass
their plan to extend the current rates some time this week.
The dispute is not likely to be resolved until after the
Romney spokeswoman Amanda Henneberg said she could not
respond to the center's report without reading it first.
Romney's tax proposal also includes cutting some taxes on
investment income and eliminating taxes on estates passed on to
(Reporting by Kim Dixon; Editing by Kevin Drawbaugh and Lisa