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Romney proposes 28 percent top US income tax rate


Wed Feb 22, 2012 7:25pm EST

* Candidate seeking to kickstart his campaign

* Plan sets lower rates, but no cost decisions

By Steve Holland and Patrick Temple-West

CHANDLER, Ariz./WASHINGTON, Feb 22 (Reuters) –
Republican Mitt Romney revised his proposal for overhauling
the U.S. tax code on Wednesday, calling for all individual tax
rates to be cut by 20 percent while declining to offer specifics
on how to make up the lost revenue from lower rates.

Romney’s new tax plan would put the top individual tax rate
at 28 percent, down from the top statutory 35 percent rate and
matching rival Republican presidential candidate Rick Santorum’s
proposed top rate.

Romney is seeking to regain momentum in his campaign for the
2012 Republican presidential nomination to face Democratic
President Barack Obama in the Nov. 6 election. The former
Massachusetts governor trails Santorum in some national polls
ahead of election primaries in Arizona and Michigan on Feb. 28.

On Wednesday night, Romney, Santorum and the two other
Republican candidates, Newt Gingrich and Ron Paul, hold a debate
in Arizona. Romney is scheduled to give an economic speech on
Friday in Detroit.

“The right way forward is a flatter, fairer, simpler tax
system that generates the revenue we need to fund a smaller
government,” Romney said during a campaign rally in Chandler.

MISSING DETAILS

The Romney campaign said on Wednesday that the candidate’s
overall budget plan would be revenue neutral. But it provided no
details on which politically contentious tax breaks would be cut
to avoid ballooning the budget deficit if his tax cuts were
implemented.

Romney campaign officials held a conference call with at
least five tax think tank groups on Wednesday.

The campaign officials told participants that the tax breaks
for mortgage interest, charitable giving and retirement savings
would be preserved. Decisions on other tax breaks would not be
made during the campaign, they said.

“Romney understands that his economic plan was uninspiring
up until this point and he needed to step it up in order to
broaden his appeal,” said Scott Hodge, president of the
nonpartisan business-oriented Tax Foundation, who was not on the
call.

“This really falls short of the sweeping tax reform plan
that I think a lot of the grass roots seem to be waiting for,”
he said.

ROMNEY’S TAXES

Romney’s personal tax rates would not be affected under his
own plan, said Bob Williams, a senior fellow at the nonpartisan
Tax Policy Center, who compared Romney’s tax plan to the
candidate’s own tax returns.

When he released his 2010 tax returns in January, Romney
drew fire for his 13.9 percent effective tax rate on more than
$21 million in income. Most of that was investment income, which
under the U.S. tax code is taxed at a lower rate – 15 percent –
than what many wage-earning Americans pay.

Romney’s plan would make permanent the 15 percent tax on
investment income.

Romney’s estate would benefit from eliminating the estate
tax, which his plan calls for. He also could gain indirectly
from a lower business rate if companies pay more in dividends.

“The tax return we all saw and that people were bemoaning
for the 13.9 percent tax rate, that wouldn’t change,” Williams
said.

Previously, Romney had proposed making permenant the
Bush-era tax cuts, which have a top 35 percent tax rate.

February 23, 2012
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