Mitt Romney told voters this weekend that his tax reform proposal — which has come under attack in recent weeks — would not lower taxes for the nation's wealthiest as some experts say it will. In an interview with NBC's "Meet the Press," Romney said, "I am not reducing taxes on high-income taxpayers. I'm bringing down the rate of taxation, but also bringing down deductions and exemptions at the high end so the revenues stay the same, the taxes people pay stay the same. Middle-income people are going to get a break."
The Republican presidential nominee's plan has been challenged and scrutinized by the Tax Policy Center. Analysts at the Center found that Romney's revenue-neutral proposal would indeed reduce taxes on families with incomes above $200,000 by $251 billion per year beginning in 2015. Lowering taxes on these families while simultaneously achieving Romney's tax goals for individuals (across-the-board cuts in the marginal tax rate by 20 percent, repealing the Alternative Minimum Tax, maintaining current rates for interest, dividends and capital gains and eliminating the Death Tax) would ultimately cause other families' (i.e. middle and lower income) tax burden to rise, the Center said.
Romney argued in the "Meet the Press" interview that he does not want to "put any bigger burden on middle income people" and emphasized that his plan to bring down the rates of taxation would not disproportionally benefit the nation's top earners.
"We are not going to have high income people pay less of the tax burden than they pay today," he said. "That's not what's going to happen. I do want to bring taxes down for middle income people."
Part of the reason why Romney's tax plan has garnered so much criticism is because the former Massachusetts governor has been light on details. Romney claims that his plan is revenue-neutral -- that is, federal government would be unchanged regardless of his tax cuts -- but he has given few specifics about how this would be accomplished. Romney said he would "keep revenue up by limiting deductions and exemptions," especially on high-income Americans. But those deductions are still a mystery.
Glenn Hubbard, a Romney economic adviser and dean of Columbia University's Business School, defended Romney's strategy in an interview with The Daily Ticker.
Hubbard says all loopholes and deductions "would be on the table" for elimination but it would be up to Congress, not President Romney, to determine which deductions would get axed. Hubbard also deferred to lawmakers on defining the terms of a "high-income earner."
President Obama wants to extend tax cuts for middle class Americans and raise them on households making more than $250,000 a year.
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