“I ran for president four years ago,’’ he said after touring a business incubator in Detroit. “At that time I was the one [who] said take the corporate tax rate from 35 percent to 25 percent. I haven’t changed that at this point. And you’ll see more as time goes on. Don’t forget, I’ve been out there with a book for two years and ran for president before and laid out my plan.’’
Romney’s personal income tax plan four years ago was less dramatic than Pawlenty’s this year, cutting the lowest tax rate from 10 percent to 7.5 percent but leaving other brackets intact.
Pawlenty would entirely eliminate taxes on capital gains, dividends, and interest income. During the last campaign, Romney said he would eliminate those taxes for those making less than $200,000, but would keep it in place for wealthier Americans.
The candidates talk about budget-cutting in broad terms, mostly without saying what specific programs would get the ax. Both Pawlenty and Romney have proposed tying the size of the federal budget to the size of the country’s economy, as measured by the gross domestic product.
Pawlenty says the United States should limit federal spending to 18 percent of GDP — a level it hasn’t been at since 1966 — while Romney has proposed capping it at 20 percent or less.
This year, federal spending is projected to be $3.8 trillion, or 25.3 percent of the economy. If that were reduced to 20 percent, it would result in about $800 billion in cuts to the federal budget. If it were reduced to 18 percent, as Pawlenty proposes, it would result in about $1.1 trillion in cuts.
During 2008, President George W. Bush’s last year in office, federal spending accounted for 20.7 percent of the economy. During 2009, Obama’s first year in office, that figure leapt to 25 percent, largely because of spending related to the federal stimulus (which Obama signed) and the Troubled Asset Relief Program (which Bush signed).
Matt Viser can be reached at maviser@globe.com.
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