President Barack Obama and Republican presidential nominee Mitt Romney traded barbs about tax policy and how they would control the budget deficit, with Romney telling Obama at one point that he might need to get a new accountant.
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After Obama said he wanted to end corporate tax breaks for companies that ship jobs overseas, Romney responded, “You said you get a deduction for taking a plant overseas. Look, I've been in business for 25 years. I have no idea what you’re talking about. I maybe need to get a new accountant.”
Obama repeatedly urged the former Massachusetts governor during their debate Wednesday night at the University of Denver to provide more details about his tax cut plan and which deductions he would eliminate to make up for an estimated $5 trillion loss in tax revenue from lowering the tax rates.
“Governor Romney's central economic plan calls for a $5 trillion tax cut—on top of the extension of the Bush tax cuts—that's another trillion dollars—and $2 trillion in additional military spending that the military hasn't asked for. That’s $8 trillion,” said Obama. “How we pay for that, reduce the deficit, and make the investments that we need to make, without dumping those costs onto middle-class Americans, I think is one of the central questions of this campaign.”
However, Romney disputed the $5 trillion estimate. “First of all, I don't have a $5 trillion tax cut,” he said. “I don’t have a tax cut of a scale that you’re talking about. My view is that we ought to provide tax relief to people in the middle class. But I’m not going to reduce the share of taxes paid by high-income people. High-income people are doing just fine in this economy. They’ll do fine whether you’re president or I am. The people who are having the hard time right now are middle- income Americans. Under the President’s policies, middle-income Americans have been buried. They’re just being crushed. Middle- income Americans have seen their income come down by $4,300. This is a tax in and of itself. I’ll call it the economy tax. It’s been crushing.”
Obama said that under his tax plan, 97 percent of small businesses would not see their income taxes go up. “Governor Romney says, well, those top 3 percent, they're the job creators, they'd be burdened,” he added. “But under Governor Romney's definition, there are a whole bunch of millionaires and billionaires who are small businesses. Donald Trump is a small business. Now, I know Donald Trump doesn’t like to think of himself as small anything, but that’s how you define small businesses if you’re getting business income.”
Obama called for cutting tax subsidies for major oil companies like ExxonMobil and for corporate jets, but like Romney he said he was in favor of lowering the overall corporate tax rate. “The oil industry gets $4 billion a year in corporate welfare,” he pointed out. “Basically, they get deductions that those small businesses that Governor Romney refers to, they don't get. Now, does anybody think that ExxonMobil needs some extra money, when they're making money every time you go to the pump? Why wouldn't we want to eliminate that? Why wouldn't we eliminate tax breaks for corporate jets? My attitude is, if you got a corporate jet, you can probably afford to pay full freight, not get a special break for it. When it comes to corporate taxes, Governor Romney has said he wants to, in a revenue neutral way, close loopholes, deductions—he hasn't identified which ones they are—but that thereby bring down the corporate rate. Well, I want to do the same thing, but I've actually identified how we can do that. And part of the way to do it is to not give tax breaks to companies that are shipping jobs overseas.”
Romney responded that the tax break for oil companies was basically just an “accounting treatment.”
“First of all, the Department of Energy has said the tax break for oil companies is $2.8 billion a year,” he said. “And it's actually an accounting treatment, as you know, that’s been in place for a hundred years.”
Obama interrupted to counter, “It's time to end it.”
Romney continued, “And in one year, you provided $90 billion in breaks to the green energy world. Now, I like green energy as well, but that’s about 50 years’ worth of what oil and gas receives. And you say Exxon and Mobil. Actually, this $2.8 billion goes largely to small companies, to drilling operators and so forth. But, you know, if we get that tax rate from 35 percent down to 25 percent, why that $2.8 billion is on the table. Of course it’s on the table. That’s probably not going to survive if you get that rate down to 25 percent.”
Romney then pointed to the billions of dollars in taxpayer money that had gone toward renewable energy companies that had not fared well financially. “But don't forget, you put $90 billion, like 50 years’ worth of breaks, into solar and wind, to Solyndra and Fisker and Tesla and Ener1. I mean, I had a friend who said you don’t just pick the winners and losers, you pick the losers, all right? So this is not the kind of policy you want to have if you want to get America energy secure.”
The two also debated entitlement reform, with Romney accusing Obama of taking $716 billion away from Medicare to fund “Obamacare,” and Obama accusing Romney of trying to privatize Medicare by turning it into a voucher program.
“On Medicare, for current retirees, he’s cutting $716 billion from the program,” said Romney of Obama’s signature health care reform law. “Now, he says by not overpaying hospitals and providers. Actually just going to them and saying, ‘We’re going to reduce the rates you get paid across the board, everybody’s going to get a lower rate.’ That’s not just going after places where there’s abuse. That’s saying we’re cutting the rates. Some 15 percent of hospitals and nursing homes say they won’t take any more Medicare patients under that scenario. We also have 50 percent of doctors who say they won’t take more Medicare patients. We have 4 million people on Medicare Advantage that will lose Medicare Advantage because of those $716 billion in cuts. I can’t understand how you can cut $716 billion for current recipients of Medicare."
Obama said he had grown fond of the term Obamacare. “I don’t think vouchers are the right way to go,” he said. “And this is not only my opinion. AARP thinks that the savings that we obtained from Medicare bolster the system, lengthen the Medicare trust fund by eight years. Benefits were not affected at all. And ironically, if you repeal Obamacare, and I have become fond of this term, ‘Obamacare,’ if you repeal it, what happens is those seniors right away are going to be paying $600 more in prescription care. They’re now going to have to be paying copays for basic checkups that can keep them healthier. And the primary beneficiary of that repeal are insurance companies that are estimated to gain billions of dollars back when they aren’t making seniors any healthier. And I don’t think that’s the right approach when it comes to making sure that Medicare is stronger over the long term.”
In one of the lighter moments of the debate, Romney described some of the spending cuts he would make to lower the federal budget deficit. Those included cutting funding for the Public Broadcasting System, even though the debate was moderated by former PBS NewsHour host Jim Lehrer.
“I'm sorry, Jim, I'm going to stop the subsidy to PBS,” said Romney. “I’m going to stop other things. I like PBS, I love Big Bird. Actually like you, too. But I’m not going to keep on spending money on things to borrow money from China to pay for. That’s number one.”