What is Mitt Romney's tax plan?

One of the most contentious exchanges in this week's closely watched presidential debate came when Mitt Romney forcefully defended his tax plan. President Obama and independent economists have warned that Romney's promise to slash income-tax rates for everyone — including the rich — and wipe out popular deductions and loopholes so as not to increase the deficit would wind up giving the wealthiest Americans huge breaks while saddling the middle class with a higher tax burden. Romney swears his critics are simply wrong. "I will not reduce the taxes paid by high-income Americans," Romney said on Wednesday, "and... I will not, under any circumstances, raise taxes on middle-income families." So, what, exactly, would Romney's plan mean for taxpayers? Here, a brief guide:

What does Romney want to do?

He plans to keep tax benefits for savings and investment, eliminate the estate and alternative minimum taxes, and slash everyone's income tax rate by 20 percent, across the board. That includes small businesses whose owners report profits on their individual returns, instead of paying corporate income taxes. As Obama and others have pointed out, the lower rates would slash nearly $5 trillion over a decade from what taxpayers would otherwise have to cough up. Obama says that will add to the federal deficit. Romney denies that, saying he'll make up for the lost revenue in other ways.

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How would Romney make up for this lost revenue?

Romney wants to cut back on deductions, exemptions, and credits that many Americans use to reduce their taxable income and tax bills. Romney has taken a lot of heat for not disclosing which loopholes he'd eliminate, but he said earlier this week that he would put a $17,000 cap on annual deductions — such as mortgage interest and charitable contributions. The thing is, that won't be enough to make up for the cost of the tax breaks, says Brookings Institution economist William Gale, who co-authored a study of Romney's tax plan for the non-partisan Tax Policy Center. "It doesn't come close to paying for the $5 trillion."

How far does the plan fall short?

The Tax Policy Center's analysis, which Romney contests, concluded that, in 2015, $86 billion of the shared national tax burden would have to be shifted onto the middle class. Otherwise, that amount would get tacked onto the federal deficit. It's just impossible, Obama said in the debate, to give everyone a huge tax rate cut and avoid increasing budget shortfalls without heaping a greater tax burden on the middle class through the closure of loopholes and deductions. "It's math," Obama said. "It's arithmetic."

Why does Romney say the plan does add up?

He says his critics are leaving out some key parts of the equation. Romney advisers, for example, say that the Tax Policy Center's calculus left out some potential savings — such as the possibility of getting rid of the tax exemption for municipal bonds. And Romney says the really big difference between his math and that of his critics is that they're not factoring in the economic growth that he says his plan will spark by cutting the taxes paid by small businesses. They'll be able to keep more of their money, Romney says, and use it to hire more workers, which will boost the economy. Then, the theory goes, everyone will make more and, therefore, pay more taxes, making up for what was lost due to the tax cuts.

So... does Romney's math add up or not?

It's debatable, though the majority of analysts seem to believe it doesn't add up. Regardless, there are many lingering questions about the ramifications of Romney's plan. Will non-profit organizations suffer if the wealthy can no longer write off charitable donations? Will Romney's tax cuts really trigger as much economic growth as he hopes? Probably not, say fact checkers at Bloomberg News. "Congressional budget-scoring rules are conservative about anticipated growth from tax cuts because economists disagree over how much they spur the economy. If Romney’s plan goes to Congress, where those rules apply, it wouldn't add up."

Sources: Bloomberg, CNN, Talking Points Memo, Wall St. Journal, Wash. Post

Read more political coverage at The Week's 2012 Election Center.