World Hot
Topics Blog
Mitt Romney tells voters: If I'm elected, don't expect
huge tax cuts
Mitt
Romney provided nuance to his proposed tax cuts, saying they must fit his goal
of reducing federal deficits. But left unanswered is the question of how this
will affect the middle class.
World Hot Topics Blog
World Hot Topics Blog
Mitt Romney says Americans
shouldn't expect a big tax cut from him if he's elected president, because the
nation also has to think about how to tame out-of-control federal deficits.
"Don't
be expecting a huge cut in taxes, because I'm also going to be closing
loopholes on deductions," Mr. Romney said Wednesday in Westerville, Ohio,
flanked by a national debt clock, chronicling the nation's rising burden on
future taxpayers.
The
comments in some ways raise as many questions as they answer.
On one
hand, they may be aimed in part at addressing skeptics who say Romney's tax
plan is "mathematically impossible." He wants to lower the deficit by
cutting spending while keeping tax revenues neutral. To do the latter, he would
cut income tax rates across the board by 20 percent and make up the difference
by eliminating some deductions and credits. Wednesday's comments could be a nod
to the scope of those proposed deduction eliminations. World Hot Topics Blog
Yet,
according to a recent independent analysis, such a plan could result in the
unpopular prospect of a net tax decrease for the wealthy and a net tax increase
for the middle class.
The independent review of Romney's proposals, released in August by the Tax Policy Center in Washington, did not claim to be an official "scoring" of the plan, because "certain components of his plan are not specified in sufficient detail." But the analysis did examine the implications of key Romney ideas. Those include the 20 percent cut, being revenue neutral, eliminating the Alternative Minimum Tax, and maintaining current tax breaks for savings and investment.
Even if Romney completely eliminates remaining tax breaks for high-income households, the net effect effect would be a tax decrease for them, the study concluded. Meanwhile, the reductions in tax breaks on other households would be large enough to result in a "net tax increase" for them, it added. Otherwise, it concluded, Romney's goal of revenue neutrality wouldn't be met.
The candidate's comments Wedensday, which offered no new details about his tax plan, leave this math question about deductions unanswered.
"I
don’t interpret this as evidence that Governor Romney wants to increase taxes
on the middle class in order to cut taxes for the rich, as an Obama campaign ad
claimed," Tax Policy Center director Donald Marron wrote in a blog shortly
after the controversial study was released. "Instead, I view it as showing
that his plan can’t accomplish all his stated objectives."
But a
Romney adviser this week suggested that there could be another solution. In a
debate between economic advisers affiliated with the two presidential
campaigns, pro-Romney economist Kevin Hassett echoed the thought that Romney
would put a priority on not raising taxes for the middle class.
Mr.
Hassett, an American Enterprise Institute economist and an informal adviser to
Romney, predicted that if the Romney math doesn't add up, Romney's response
would be to scale back the cut in tax rates in order to avoid asking
middle-class families to provide more tax revenue.
This World
Hot Topics Blog is Originally from here :
Mitt Romney tells voters: If I'm elected, don't expect
huge tax cuts
http:// news.yahoo.com/mitt-romney-tells-voters-im-elected-dont-expect-225633186.html
