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Romney Sidesteps Details of Tax Plan for Top Earners

September 09, 2012

Romney Sidesteps Details of Tax Overhaul Plan for Top Earners

Republican presidential nominee Mitt Romney said it was a “big mistake” for Republican leaders in Congress to back automatic cuts of $1.2 trillion during negotiations last year to raise the U.S. debt limit. Photographer: Andrew Harrer/Bloomberg

Republican presidential nominee Mitt Romney said he’ll reduce the number of deductions and exemptions for high-income taxpayers, while declining to say which ones he would get rid of as part of his plan.

Romney said he wants to reduce tax rates while maintaining the revenue collected by the government. The goal, he said, is to not lower taxes on high income earners while cutting them for middle income earners by doing away with the taxes they would pay on interest, dividends and capital gains.

“People at the high end, high income taxpayers, are going to have fewer deductions and exemptions. Those numbers are going to come down. Otherwise they’d get a tax break,” Romney said on NBC’s “Meet the Press” today. “I want to make sure people understand, despite what the Democrats said at their convention, I am not reducing taxes on high income taxpayers.”

He said he wouldn’t raise taxes on middle-income earners to reduce the nation’s deficit.

“My tax policy is designed to find a way to encourage more hiring in this country,” Romney said. “We encourage small business, because small business is able to keep more of what it makes and therefore hire more people, which is my priority.”

In an interview aired today on ABC’s “This Week,” Romney’s running mate, Wisconsin Representative Paul Ryan, also wouldn’t say which deductions and exemptions for high-income earners he and Romney would seek to eliminate.

Public Debate

A Romney administration would insist on a public debate over deficit reduction and would never “cut some back-room deal” to overhaul the tax code and reduce spending, Ryan said.

“We want to have this debate with Congress, and we want to do this with the consent of the elected representatives of the people and figure out what loopholes should stay or go and who should or should not get them,” he said. “What we don’t want is a secret plan. What we don’t want to do is cut some back-room deal.”

Lanhee Chen, Romney’s domestic policy adviser, said Romney doesn’t want to cut homeownership and health-care tax breaks, especially for middle-income people.

“This silly idea that, I’ve got to tell you exactly -- I’m going to presume and presuppose these are the things that we’re going to curb and these are the things we’re going to change -- I think, represents an unrealistic view of how this works,” Chen said.

Working With Republicans

President Barack Obama said in a portion of an interview aired today on CBS’s “Face the Nation” that he is “more than happy to work with the Republicans” to make the federal government “leaner and more efficient,” so long as a greater tax burden is shifted to the wealthy.

“You can’t reduce the deficit unless you take a balanced approach that says, ‘We’ve gotta make government leaner and more efficient,’ but we’ve also got to ask people like me or Governor Romney who have done better than anybody else over the course of the last decade and whose taxes are just about lower than they’ve been in the last 50 years to do a little bit more,” Obama said.

Allowing the George W. Bush-era tax cuts to expire for individuals earning more than $200,000 a year and families earning more than $250,000 a year would “close the deficit, stabilize the economy, keep taxes on middle class families low,” while providing economic certainty, Obama said. The Bush- era tax cuts expire Dec. 31.

Force for Good

The president revived the theme of his speech last week at the Democratic National Convention in Charlotte, North Carolina, saying “government can be a force for good when it comes to creating opportunity for folks who are willing to work hard and play by the rules to get into the middle class.”

“We have an obligation to make sure government works,” Obama said. “And there’s still waste, there’re still programs that don’t work.”

The narrow lead Obama gained on Romney during last week’s Democratic convention widened in a Gallup Poll conducted Sept. 2-8, which showed 49 percent of voters supporting Obama, compared with 44 percent for Romney. The candidates had been within one percentage point since mid-August until Obama registered a three-percentage-point lead in the poll conducted Aug. 31-Sept. 6.

The Gallup poll, updated daily, is based on telephone interviews with 3,050 registered voters and has a margin of error of plus or minus two percentage points.

Reuters Poll

A Reuters/Ipsos poll released yesterday also showed Obama opening a lead. Obama topped Romney by four percentage points in the polling organization’s latest four-day tracking poll of 1,457 likely voters, up from a two-percentage-point lead a day earlier. The latest poll had a margin of error of plus or minus 2.7 percentage points.

Romney said it was a “big mistake” for Republican leaders in Congress to back automatic cuts of $1.2 trillion during negotiations last year to raise the U.S. debt limit.

The automatic cuts, known as sequestration, are required by the 2011 agreement to raise the U.S. debt limit and were designed to require Congress to find other deficit-reduction proposals to replace them. Lawmakers so far haven’t agreed on such a plan. About half of the automatic cuts come from defense spending.

Ryan voted for the automatic cuts and then tried to undo them this year. The Republican-led House in May passed a bill to avert $500 billion in defense cuts.

“The goal was never that these defense cuts actually occur,” Ryan said in an interview that aired today on “Face the Nation.” “The goal is that we get to work and cut spending so that we prevent those defense cuts. We’ve done that. The president hasn’t.”

Defense Spending

Romney said he wants to maintain defense spending at the current level of the gross domestic product, about 3.5 percent.

“I don’t want to keep bringing it down as the president’s doing,” Romney said.

The Republican nominee said he would balance the budget by the end of his second term as president. Doing so in the first term would cause a “dramatic impact on the economy. Too dramatic,” he said.

“We’ve put together a plan that lays out how we get to a balanced budget within eight to 10 years,” Romney said.

Romney indicated that he might be satisfied with being a one-term president. “If I can get this country back on track again, I’d be satisfied with anything.”

On CBS, Ryan cited the most recent jobs report as evidence of why voters shouldn’t elect Obama to a second term on Nov. 6.

96,000 Jobs

The Labor Department reported Sept. 7 that the economy added 96,000 jobs in August, down from a revised gain of 141,000 in July. While the unemployment rate fell to 8.1 percent from 8.3 percent in July, it was because more people have given up looking for employment.

“This isn’t working,” Ryan said. “And that’s why we’re offering the country a better choice.”

Even as he vows to replace Obama’s health-care law, Romney said today he would keep health insurance coverage for people with pre-existing conditions.

“I’m not getting rid of all of health-care reform. Of course there are a number of things that I like in health-care reform that I’m going to put in place,” the former Massachusetts governor said. “One is to make sure that those with pre-existing conditions can get coverage.”

Romney, who as governor enacted his own state health-care system, said he would also allow “individuals to have policies that cover their family up to whatever age they might like,” and also be able to buy insurance on their own instead of “only being able to get it on a tax-advantage basis through their company.”

Medicare Overhaul

Romney again defended a Medicare overhaul that would give future retirees a subsidy to buy private insurance rather than have all their health needs covered by the government.

Romney’s vision is close to the one Ryan pushed through the U.S. House. Romney said his plan is similar to the current “Medicare Advantage” and dismissed criticism that the plan didn’t drive down costs.

“Look, competition works,” Romney said.

While Obama said he would be willing “to make some adjustments to Medicare and Medicaid that would strengthen the programs,” he criticized Ryan’s proposal, which he said would “voucherize” Medicare and drive up seniors’ health care costs.

On ABC, Ryan defended his proposal to cut Medicaid, the health-care program for the poor, by about $800 billion over the next decade.

Failing Program

“We don’t want to put more money and force more people on a program that’s failing, that’s not working,” Ryan said. “What we’re saying is, don’t expand this program as dramatically as Obamacare does. Keep it like it is, increase its funding and send it to the states, the states can fix this problem.”

Ann Romney participated in part of the NBC interview and said she wants to dispel the notion that she and her husband don’t know what it is like “to struggle.”

“Mitt and I do recognize that we have not had a financial struggle in our lives,” she said. “But I want people to believe in their hearts that we know what it is like to struggle.”

She said that her diagnosis of multiple sclerosis has been her “teacher.”

“It has been at times a cruel teacher,” she said. “But it has also been a great gift in my life because what it has done, it has taught me to be more compassionate and caring for others that are suffering. It’s ridiculous to think that you can’t have empathy for somebody that’s struggling.”

Clint Eastwood

On a lighter note, Romney said that he laughed at actor Clint Eastwood’s surprise speech during the Republican convention in Tampa, Florida. Eastwood delivered an improvisational and imaginary conversation with Obama, represented by an empty chair.

“I was laughing at Clint Eastwood. Look, to have him get up and speak on my behalf was a great thrill,” Romney said. “You don’t expect to have a guy like Clint Eastwood get up and, you know, read some speech off a teleprompter like a politician. You expect him to speak from the heart and that’s exactly what he did.”

Ryan, meanwhile, criticized Obama for saying in his speech at the Democratic National Convention in Charlotte last week that Romney didn’t have adequate foreign policy experience. Obama said Romney’s gaffe during a July trip to London, in which he suggested London might not be prepared to host the Olympic games, suggested Romney “might not be ready for diplomacy with Beijing.”

Foreign Policy

“Those kinds of comments are things that are said when you don’t really have a good record to run on,” Ryan said.

Ryan said on CBS that he would have more foreign policy experience coming into the vice president’s job than Obama had when he was first elected president.

“I’ve been in Congress for 14 years,” Ryan said. “He was in the Senate for far, far less time than that.”

Ryan said that while he and Romney agreed with a 2014 time frame for withdrawing U.S. troops from Afghanistan, they thought political calculations had wrongly come into play in determining troop strengths.

“Where we’ve taken issue is making sure that the generals on the ground get the resources they need throughout the entire fighting season,” Ryan said. “I fear that there have been more political decisions made in troop strengths.”

To contact the reporters on this story: Kathleen Hunter in Washington at khunter9@bloomberg.net; Roxana Tiron in Washington at rtiron@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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