How Big is Romney’s Middle Class Tax Cut?

The Romney-Ryan tax plan gets a jumpstart on fundamental tax reform.  To do this, the plan would lower all marginal income tax rates by 20 percent.  To pay for this rate reduction, the Romney-Ryan tax plan would broaden the income tax base, but only for high earners.

Below is how three typical middle-income households will fare under the Romney-Ryan tax plan (each household is assumed to use the standard deduction and personal exemptions/child tax credit):

Family of Four earning the median income:

Adjusted gross income:                                                                $70,000

Federal income tax under present rules:                                      $3,581

Federal income tax under Romney-Ryan:                                    $2,465

Annual Tax Savings                                                                    $1,116

Single parent with two dependent children:

Adjusted gross income:                                                                $50,000

Federal income tax under present rules:                                      $1,874

Federal income tax under Romney-Ryan:                                    $1,099

Annual Tax Savings                                                                    $775

Single taxpayer:

Adjusted gross income:                                                                 $30,000

Federal income tax under present rules:                                       $2,609

Federal income tax under Romney-Ryan:                                     $2,087

Annual Tax Savings                                                                     $522