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While GOP presidential hopeful Mitt Romney has provided a bit more information on his tax plan, many key details are still missing – meaning it's tough to figure out exactly what you'd owe Uncle Sam if Romney wins Election 2012.
Romney and vice-presidential running mate Rep. Paul Ryan, R-WI, have outlined several broad Romney tax plan goals: do not increase the deficit; do not raise taxes on middle income taxpayers; and do not reduce the share of taxes paid by higher-income Americans.
Romney also has repeatedly made it known he favors an extension of the Bush-era tax cuts for all income levels.
Ryan has said a Romney administration would be able to work with Democrats in Congress to pass a tax re-write, which includes a 20% reduction in individual tax rates across the board, a 10% reduction for businesses and a 20% cut in the top tax rate from 35% to 28%. (President Barack Obama plans to raise that rate to 39.6%).
But neither Ryan nor Romney has yet to give full details on which tax breaks will be scaled back to avoid adding to the mushrooming federal deficit, which topped $1 trillion in 2012 for the fourth straight year.
The lack of Romney tax plan details prompted President Obama to call it "sketchy" at the second presidential debate.
"Governor Romney was a very successful investor," said the president. "If somebody came to you, governor, with a plan that said, here, I want to spend $7 or $8 trillion, and then we're going to pay for it, but we can't tell you until maybe after the election how we're going to do it, you wouldn't have taken such a sketchy deal and neither should you, the American people, because the math doesn't add up. We haven't heard from the governor any specifics beyond Big Bird and eliminating funding forPlannedParenthood in terms of how he pays for that."
Romney Tax Plan: Where's the Money Coming From?
Ryan recently spoke in defense of the GOP's stance to not reveal which deductions would be cut.
"What we've learned from experience -Mitt's experience as governor, my experience doing tax law-is that you don't go to Congress and say, "Take it or leave it; here's my plan-pass it,'" said Ryan. "You say, "Here's my framework, here's my objective. Now, let's figure out together how to accomplish these objectives.' That's how you maximize the possibility of getting things done."
Supporters of President Obama were quick to weigh in.
"Mitt Romney and Paul Ryan are hiding the specifics of their tax plan, because the math doesn't add up without a middle-class tax hike, plain and simple," Danny Kanner, an Obama campaign spokesperson told The Wall Street Journal.
According to President Obama's camp, the estimated $5 trillion in cuts (what they'd cost over a decade) that Romney has promised cannot be recouped without cutting deductions and other tax breaks that mostly benefit the middle and upper middle class. These include deductions for home mortgage interest, charitable giving, state and local taxes, and the exclusion for employer-paid health insurance, according to President Obama's campaign.
Roberton Williams of the Washington-based Tax Policy Center told the Washington Post, "You can't do all those things. The rich get such savings from the rate cuts that there just aren't enough tax breaks that benefit them that taking them away would recoup the full lost revenue from the tax rates."
In order to make up the money not coming in from higher taxes – something no taxpayer wants to see – the Romney tax plan relies on new revenue from economic growth.
But for that strategy to work, U.S. economic growth needs to improve substantially over what we've seen in the last two years.
Ryan's Role in the Romney Tax Plan
Ryan said in an interview Saturday at Ohio's Youngstown State University that if he and Romney win Election 2012, he will take the lead in working with Congress on fiscal matters.
"This is one of the reasons why he asked me to sign on," Ryan added.
As chairman of the House Budget Committee, Ryan has lobbied to reduce runaway federal spending and revamp numerous entitlement programs.
"It was because of my leadership and the reforms I'd been pushing that he asked me. He said, "I need help. I want your help to help me save this country from a debt crisis, to get this economy back on track,'" said the Wisconsin congressman.
While Ryan maintains a Romney Election 2012 win would encourage a tax deal with Congress, don't expect any progress before the end of the year. Ryan believes now is not the time to press the matter.
"We shouldn't be negotiating the details of tax reform in the middle of a campaign," Ryan said.
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