Republican presidential candidate Mitt Romney has no intention to raise taxes if he is elected in November. “The only solution to taming an out of control spending government is to cut spending.”
Romney, who is expected to be formally nominated for the presidency by his party in August, insisted in an interview with CBS News’ Face the Nation that was broadcast on Sunday that raising taxes, as Democratic incumbent president Barack Obama has proposed, will not mend America’s $1.3 trillion federal budget shortfall.
There are those who think, well, the answer is just to take a little more from the American people. There are places that have gone that way. California, for instances, keeps raising taxes more and more and more and funny thing—the more they their raise taxes, the deficits get larger and larger.
The United States have not had a deficit under $1 trillion throughout Barack Obama’s presidency. Federal government spending reached a high of 25 percent of gross domestic product in 2009, the highest level relative to economic output since the end of the World War II. Romney promises to reduce that to 20 percent to “ignite growth” in the economy although his fiscal plan falls short on the details of budget cuts.
Besides defense, entitlement programs like Medicare, which finances health care for seniors, and Social Security, which pays public pensions, are the main drivers of America’s ballooning budget projections. Romney has embraced Wisconsin congressman Paul Ryan’s plan to replace the current Medicare system with health insurance subsidies for future generations but hasn’t offered a plan for Social Security reform yet.
On taxes, the former Massachusetts governor was clearer. He told Face the Nation that he would seek to limit tax deductions and exemptions to allow for lower rates. “Mathematically it’s been proven to be possible,” he said, referring to a plan that was put forward by former Republican senator Alan Simpson and Democrat Erskine Bowles at the commission of the president. They proposed to cancel most tax deductions while lowering the corporate tax rate from 35 to 26 percent. President Obama failed to act on their plans but has since called for a reduction in the corporate tax rate.
Romney added that “the right way” to alter deductions and exemptions is “to limit them for high income individuals” in order to “keep the progressivity” of the tax code. Although he wants to reduce all income tax brackets, “One of the absolute requirements of any tax reform that I have in mind is that people who are at the high end will still pay the same share of the tax burden they’re paying now,” he said.
In 2010, the top 1 percent of income earners paid 38 percent of federal income tax revenue while the top 5 percent paid 59 percent. President Obama insists, nonetheless, that the rich aren’t paying their “fair share” because they pay a lower percentage in taxes over capital gains than most Americans do over their income.