Economic event ( read steps down ) Essay Example | Topics and Well Written Essays - 1000 words

Economic event ( read steps down ) - Essay Example In brief, the Reagan Tax Reform Act of 1986 was passed by a bi-partisan majority in both house and senate and signed into law by the President. What this affected was lowering the top individual income tax rate from 50% to 28% (Cebula 132). Although this was a vast reduction, it was in fact revenue â€Å"neutral† as the tax burden that was created from the savings was merely passed off onto businesses. President Bush further passed legislation that reduced the tax burden down from 28% to 20%. This has caused an ever increasing budget deficit as Washington is both unable to curtail spending and seemingly obsessed with further tax cuts. It is this cycle of ever increasing budgets and the inability to raise taxes on any group due to the political pressures that have evolved into the unique situation that both political candidates face. Further complicating the issue is the fact that Mitt Romney’s plan intends on keeping the Bush era tax cuts and extending them indefinitely. Similarly, his tax plan claims that although no additional percentage tax increases will be affected, additional revenue will be generated by reducing itemized deductions and other special benefits that the wealthy typically enjoy on their taxes. Analysis by independent think tanks and tax analysts have proven that this particular maneuver will not even come close to closing the revenue gap that further reduction in the highest individual rates will have (William 4). Furthermore, if Mr. Romney will be able to meet the same level of tax revenues while reducing the tax revenues generated from the wealthy, this will invariably be dependent upon the plan’s ability to cover the shortfalls of tax revenue/generation. Likewise, a primary issue that one quickly realizes when analyzing Mitt Romney’s tax plan is the fact that he is interested in: cutting the