The economists at the Tax Policy Center weren't the first to suspect that Romney's plan would amount to a huge tax cut for the wealthy financed by an effective tax increase on the middle class -- even if you assume faster-than-expected growth. But they have just the right mix of academic and political credibility to make the conclusion stick. And unless Romney can bamboozle the political press corps into thinking TPC is some kind of lefty propaganda mill (and I don't think he can) he's facing a dilemma as serious as the one presented by his decision to release only one complete year of his tax returns.
At an obvious level this provides Obama campaign a huge cache of ammunition. What was once "Governor Romney's plan would cut taxes for the folks at the very top," is now, "Now he has a plan that will give millionaires another tax break and raises taxes on middle class families by up to $2000 dollars a year."
But that brings us to the parallel with Romney's tax returns: the only way for him to make the problem go away is to fork over the goods -- either name the popular deductions he would like to cap or eliminate or admit that the framework is a fantastical pander. Or let the story stand as is. All bad options.
For now, Romney's hoping misdirection does the trick. His campaign is attacking TPC's reputation and its methodology, but ultimately the complaint amounts to whacking TPC for not including enough Magic Romney Growth Elixir in its calculations. To that end, Romney adviser Glenn Hubbard is now promising 12 million new jobs in Romney's first term and up to a percent a year of extra GDP growth over the next decade under a Romney regime.
Assuming this approach fails, at some point he's going to have to decide what his next best choice is. Change the plan and alienate the powerful supply siders in his coalition? Get specific and suffer different, potentially worse, political recriminations? Or weather the basically substantiated allegation that he wants to raise middle class taxes to finance tax cuts for the wealthy. That would be hard enough even if he weren't himself a fantastically wealthy person whose taxes are already so low that he's unwilling to disclose his returns to the public.