Radical Romney Tax Plan Could Be a Difference Maker in GOP Race, by James Pethokoukis:
In his recent video rave, Osama bin Laden had plenty to say about high U.S. taxes and the mortgage credit crunch. The latter issue has been all but absent from the GOP presidential campaign. As for the former, front-runners Rudy Giuliani, Mitt Romney, Fred Thompson, and John McCain have said little more than that they would extend the 2001 and 2003 Bush tax cuts on income and investments, plus keep the expanded child tax credit, instead of letting them expire at the end of 2010. But that idea, whatever its economic soundness and positive pro-growth aspects, doesn’t really seem to help voters much in the here and now –- or at least in 2009. It looks to the past–these guys credit the tax cuts for boosting the economy in the first part of the decade. And it also looks to the future –- the candidates warn of dire economic consequences should the cuts expire and taxes rocket higher in 2011. Yet what about helping folks in the present? (Even dealing with the AMT is about preventing something bad from happening in the future, plus the Dems want to do the same thing.)
Romney may have begun to address that issue –- and differentiate himself from his rivals –- with his populist-yet-pro-growth Middle Class Savings Plan, the details of which he recently released. As he wrote in the New Hampshire Union Leader:
I have proposed changing the rate of taxation on capital gains, dividends and interest to 0% for middle class Americans. … In 2003, we passed major cuts in the tax rate on capital gains and dividends, instituting a new, lower top rate of 15%. Many Democratic critics of this tax cut claimed that cutting rates would blow a hole in our budget and hurt our prosperity. In fact, the opposite occurred. … The rate of economic growth in our economy more than tripled, going from 0.8% in the two years before the rate cuts to 3.1% in the two years following the tax cuts. Capital gains tax receipts actually increased from $58 billion in 2002 to $103 billion in 2006. … Under my plan, any taxpayer with Adjusted Gross Income of under $200,000 would pay a tax rate of absolutely 0% on all of the income they earn from their savings. This will allow over 95% of American families to save and invest tax-free without worrying about the federal government reaching into their pockets and snatching a share of their savings income each year.
See Romney’s press releases: Florida, Iowa, Michigan, South Carolina. Press coverage:
