After reading the details and seeing reactions from the left Mitt Romney‘s plan is dismal at best and not passable since it won’t aid the economy. The liberal community says….it raises taxes on the middle class and ends the earned income tax credit. The EITC is free money, up to $3600 or so and illegal aliens qualify if they know how to apply. Better to close that out but it shifts to education credit.
If Romney knows how the economy works then where’s the beef ? Oh yea, corporate tax rates drop to 25%, the same as China. We really need 20% to put us in a position to compete globally and take jobs from China if industry sees capacity to repatriate jobs. If Romney wins and were successful in cutting the budget and closing a couple of agencies then everything improves but I don’t expect dems to give an inch on new tax breaks coupled with closing anything, it only empowers them to think 2016 and hurt the economy further. He’ll have to do better than this. Details from the non partisan Tax Policy Center.
Governor Romney would permanently extend all the 2001 and 2003 tax cuts now scheduled to expire in 2013 and continue to “patch” the alternative minimum tax, but would allow some recently enacted provisions to expire and would repeal certain tax provisions in the 2010 health reform legislation. Tax provisions in the 2009 stimulus act and subsequently extended through 2012 would expire. These include the American Opportunity tax credit for higher education, the expanded refundability of the child credit, and the expansion of the earned income tax credit (EITC). The plan would also eliminate tax on long-term capital gains, dividends, and interest income for married couples filing jointly with income under $200,000 ($100,000 for single filers and $150,000 for heads of household) and repeal the federal estate tax, while continuing the gift tax with a maximum tax rate of 35 percent.2
At the corporate level, the Romney plan would make two major changes: 1) reduce the corporate income tax rate from 35 to 25 percent and 2) make the research and experimentation credit permanent and extend for one year the full expensing of capital expenditures. It would also allow a “tax holiday” for the repatriation of corporate profits held overseas but does not specify whether repatriated earnings would face any tax (and, if so, at what rate). In the longer run, Gov. Romney would reduce the corporate rate further in conjunction with base broadening and simplification and would move the corporate tax to a territorial system.
Gov. Romney would also permanently repeal the 0.9 percent tax on wages and the 3.8 percent tax on investment income of high-income individual taxpayers that were imposed by the 2010 health reform legislation and are scheduled to take effect in 2013.
TPC’s analysis measures the change in tax liabilities against two alternative baselines: current law, which assumes that the 2001-10 tax cuts all expire in 2013 as scheduled, and current policy, which assumes that the 2011 law is permanent (except for the one-year payroll tax cut and temporary investment incentives). Compared with the current law baseline, the Romney plan would cut taxes for about three-fourths of taxpayers by an average of more than $4,700. In contrast, compared with current policy, about 13 percent of tax units would see their 2015 taxes go up an average of more than $900 while 42 percent would get tax cuts averaging nearly $2,900.
Some people would see their taxes rise relative to the current policy baseline because of the expiration of the American Opportunity Tax Credit and expiration of the expansion of the earned income credit and the child credit enacted in 2009.
The Romney plan would reduce federal tax revenues substantially. TPC estimates that on a static basis, the Romney plan would lower federal tax liability by $600 billion in calendar year 2015 compared with current law, roughly a 16 percent cut in total projected revenue. Relative to a current policy baseline, the reduction in liability would be roughly $180 billion in calendar year 2015.
The Romney plan would change the distribution of the federal tax burden, as shown in these tables.
Economists and political strategists are skeptical that his economic plan will remain so radical as the campaign evolves. It sits uneasily with his track record as a moderate, could alienate independent voters he would need to defeat Obama, and deep, rapid budget cuts would risk tanking a shaky economy growing at a 2 percent pace.
“I do think he is quite pragmatic,” said Greg Valliere, political economist at Potomac Research Group.
Romney wants to create the image of someone determined to scale back Washington pitted against a big-government president in order to pick up enough voters to secure the Republican nomination quickly.
“He has latitude to move back to the center in time for November where the criticism that he is a moderate will be a plus for him” to win over independents, Valliere said.
Thomas Gallagher, a former Wall Street economist and principal at the business advisory firm Scowcroft Group, agrees.
“I don’t think his economic platform is very predictive of what he would do in 2013.”
By laying out a blueprint on his website that lacks much detail, it allows Romney to embrace touchstone issues such as a balanced budget amendment dear to Tea Party activists on the Republican right, while retaining the leeway to shift course later, Gallagher said.
This vagueness on economic policy also creates vulnerabilities.
“He is trying to play both sides of the fence which is what worries a lot of conservatives about him. That may play well in the election, but people want some authenticity in what their leaders are telling them,” said James Campbell, political scientist at State University of New York in Buffalo.
And if Romney fails to convince the right that his plan is sufficiently anti-tax and anti-big government, it could inspire an independent candidate who would splinter the Republican vote and weaken his chances of winning in November.