President Barack Obama criticized Republican rival Mitt Romney’s tax reform plans during a campaign appearance, referring to them as “Robin Hood in reverse” and “Romney Hood.”
Like what you see? Click here to sign up for Accounting Today's daily newsletter to get the latest news and behind the scenes commentary you won't find anywhere else.
“In fact, the entire centerpiece of Mitt Romney’s economic plan is a new $5 trillion tax cut,” Obama said at a campaign appearance at the Stamford Marriott Hotel in Stamford, Conn., on Monday night. “And we’ve known for a while that a lot of this tax cut would go to the wealthiest 1 percent of all households. But just last week, an independent, nonpartisan organization crunched the numbers. They went through what would it mean to add a $5 trillion tax cut. Just to give you a sense of perspective here, our entire defense budget is over $500 billion a year, but it’s less than $600 billion. So you’re talking about each year, a tax cut that’s equivalent of our defense budget for the next 10 years.”
Obama was referring to a study by the Urban Institute’s and Brookings Institution’s Tax Policy Center analyzing Romney’s tax policy.
“And what this policy center did was—it just ran the numbers—if you wanted to actually pay for that, what would that mean,” Obama added. “And they determined that Governor Romney’s plan would effectively raise taxes on middle-class families with children by an average of $2,000—to pay for this tax cut. Not to reduce the deficit. Not to invest in things that grow our economy, like education or roads or basic research. He’d ask the middle class to pay more in taxes so that he could give another $250,000 tax cut to people making more than $3 million a year. It’s like Robin Hood in reverse. It’s Romney Hood.”
Republicans have criticized the Tax Policy Center study, noting that it was co-authored by a former Obama staffer, Adam Looney, who was senior economist for public finance and tax policy with the President's Council of Economic Advisers and was an economist at the Federal Reserve Board. However, defenders of the study have pointed out that another co-author of the study, William Gale, was a senior staff economist on the President’s Council of Economic Advisers under President George H.W. Bush. A third co-author, Samuel Brown, used to work for the Federal Reserve Board.
“If this sounds like an idea that’s difficult to explain or sell to the American people, you’d be right,” said Obama of Romney’s tax policies. “So there were all kinds of different gymnastics being performed by the Romney campaign last week. They have tried to sell us this trickle-down, tax cut fairy dust before. And guess what—it does not work. It didn’t work then; it won’t work now. It’s not a plan to create jobs. It’s not a plan to reduce our deficit. And it is not a plan to move our economy forward. We do not need—I do not need a tax cut. We need tax cuts for working Americans. We need tax cuts for families who are trying to raise kids, and keep them healthy, and send them to college, and keep a roof over their heads. So that’s the choice in this election. That’s what this is about. That’s why I’m running for a second term as President of the United States. “
The Romney campaign disputed Obama’s characterization of his tax plan. “There’s only one candidate in this race who’s going to raise taxes on the American people, and that’s Barack Obama,” said Romney campaign spokesman Ryan Williams in a statement to Bloomberg News. “While he’s used taxpayer dollars to grow government and reward his donors, middle-class Americans have seen fewer jobs, lower incomes and less hope for the future.”
Obama said he has a different plan for America. “Four years ago, I promised to cut middle-class taxes. That’s exactly what I’ve done, by a total of about $3,600 for the typical family,” he said. “So I want to keep taxes exactly where they are for the first $250,000 of everybody’s income. If your family makes under $250,000—like 98 percent of Americans do—you will not see your income taxes increase by a single dime next year. And if you’re fortunate enough—as many of you are, as I am—to be in the other 2 percent, you still keep the tax cut on the first $250,000 of your income. All we’re asking is that, after that, you contribute a little bit more so we can pay down our deficit and invest in things like education that will help us grow.”