The differences in both strategy and substance of the two plans reflect the divergent approaches to taxes underlying their election campaigns. They also reveal how Obama and Romney would wield the tax code to reinforce their visions for the role and size of government, with the president seeking to preserve safety-net programs and the former Massachusetts governor wanting to trim them.
The political spin began immediately. Romney criticized Obama for failing to set policies to accelerate economic recovery and said some businesses would bear billions of dollars in added costs under his plan. Obama’s campaign characterized Romney’s plan as “irresponsible and reckless.’’
The vagueness of both plans leaves specialists wary. Obama’s plan to reduce the corporate tax rate to 28 percent would cut revenues by about $700 billion over the next decade, said the Joint Committee on Taxation. That means the administration would have to close about $70 billion a year in tax loopholes to avoid adding to the budget deficit.
“Both plans share similarity in that they’re very specific about what taxes they are going to cut and offer considerably less specifics on how they’re going to pay for it,’’ said Joseph Rosenberg, research associate with the nonpartisan Tax Policy Center in Washington. “Both claim to be revenue neutral, but frankly with the Romney proposal especially, I fail to see how they’d possibly do it.’’
That plan builds on the 59-point economic blueprint he released last year to lower corporate tax rates to 25 percent, reduce regulatory restrictions, and provide an investment income tax break for the middle class. The plan did not address individual tax rates until now.
