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.
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.
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.
In general, many tax experts endorse the concept Romney is talking about: reducing tax rates while also reducing or eliminating many deductions or credits to "broaden the base" of income that is subject to taxation. The idea is that a simpler tax code will be more efficient at both gathering federal revenue and stimulating strong economic growth – even if the reform makes no change in total federal revenue.