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.
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.”
Medicare Reform
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.”
Big Bird
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.”
15 Comments
I've always thought that Big Bird was rather scary.
What I really find scary is a big-headed, big-mouthed member of a polygamist cult who was raised as a trust-fund brat and has never done an honest days work in his life and who thinks that Donald Trump is a small businessman and that Bain Capital was a small business.
Give me a President who has earned his way through college on academic scholarships and who has actually pumped his own gas during his life.
BTW - while Walter "Mitt" Romney was obsessed with his "training sessions" day and night for weeks leading up to this debate, our President was just a little busy running the country.
Kate Harner, EA
Posted by: KATEHARNER | October 5, 2012 2:11 PM
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Glad I watched Pawnstars last night and not the debate. I plan to continue with this plan until the elections a mercifully over. With the limits on spending now removed, I've lost all interest and all respect for both parties.
And unless the GOP runs the table with at least 60 folks in the Senate, or less likely, the Dems do likewise, it's four more years of gridlock, with we the people nothing but a pawn.
Look for the can-kicking exercises to begin shortly following the elections.
Posted by: topbeancounter | October 4, 2012 8:27 PM
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@pusherhombre - first, let me say I'm not a Obama supporter, but you are asking "how can you say your taxes won't go up with Obama care?" His answer is going to be pretty simple, "If they keep their health care, there is no added tax."
While this is true, this doesn't account for plans that will not qualify for the governmental restrictions that deny types of high-deductible plans. Since this hasn't been completely defined yet - it is not like we can say for sure who and what plans will not qualify and therefore they will have to drop health insurance and pay the tax or pay more for a low deductible plan.
Posted by: Zeo | October 4, 2012 5:26 PM
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"Obama said that under his tax plan, 97 percent of small businesses would not see their income taxes go up."
Okay. So. . . how do taxes not go up for small businesses if the Obama plan is to sunset the Obama/Bush tax cuts and raise everybody's tax rates back to the Clinton era? Doesn't everybody's taxes rise?
And what about ObamaCare? Didn't the Supreme Court and the Obama Administration agree that was a tax?
Mr. President, please tell me again how 97% of small businesses will not see their income taxes go up. Your statement does not line up with reality. "Simple arithmetic," as you say. Prices for health insurance are skyrocketing and when ObamaCare kicks in, everybody's taxes rise.
Posted by: pusherhombre | October 4, 2012 1:26 PM
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The President definitely was off his game last night compared to his debating skills shown 4 years ago. Mr. Romney pulled it off but, not by a big landslide. He better not let up in polishing and focusing because if the President gets back on the rail, it can turn into a Kennedy vs Nixon ending where Nixon had the better focus and message while Kennedy had the better communications ands appeal.
In reviewing the prior campaign and debates, the President was a indefinite as Mr. Romney is, a basic fact for someone not in office. But, the President has no message about his 2nd term of office, no vision of what he wants to accomplished while Mr. Romney has outlined goals both specific and broad. In business we say, it is not what you did yesterday the defines leadership but what you do today. He needs to focus on delivering this message.
Mr. Romney's problem is trying to bridge a wide group of political positions from the Tea Party to the liberal conservatives. he has shown he does not fit firmly in any specific camp that indicates he does not have narrow thinking as to issues, a good thing as it means he can listen to competing views and develop his own opinion not being locked into the traditional conservative, ultra conservative, liberal, classifications. A good thing when it comes to engaging nonpartison negotiations, something the Pressident aid he could do but has consistently shown he talks the talk but does not walk the walk. Each time a Repulican offered solution is offered it he simply dismissed it out of hand whereby eventually the Republicans just gave uop trying to work with or through him.
Mr. Romney has proffered bits and pieces to help the economy but pieces are missing and he needs to better connect the dots to get the people to understand better his message. The economy is the cornerstone to his campaign and is not getting the message clearly across.
If Mr. Romney loses it will be because he has the qualities of Nixon and Goldwater that sadly wee overshawdowed by personality preference at the voting booths.
Posted by: BrianL | October 4, 2012 11:45 AM
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Deducting moving expenses is a tax break, albeit a legal one. I have to say, I'm with the President on this one. I believe the moving expense deduction should be eliminated or reduced for corporations that move existing US operations out of the country.
Posted by: Maggie D | October 4, 2012 11:12 AM
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Who needs deductions - be like General Motors and be given stimulus money to relocate plants overseas.
Posted by: imacpa | October 4, 2012 10:43 AM
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To CA Vallabhdas Raichura: Can you please be specific as to what Romney has changed? I haven't heard any change in position. Romney demonstrated last night that he understands true leadership. You lay down the principles and work across party lines to hash out what works. You don't come in and demand your way, meet with your party behind closed doors, blame everything on the other party or the former president, issue executive orders at every opportunity and tell Americans that corporations are evil.
Romney could promise to eliminate all kinds of deductions and exemptions, but what ultimately gets passed may look nothing like what he promised because that's not how it works with a two-party legislature.
Posted by: twardcpa | October 4, 2012 10:37 AM
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I'm sure Romney knows that moving expenses are deductible as ordinary and necessary business expenses. The president is trying to play on those who don't know taxes by calling that a "tax break". He'll never get that passed just as he'll never be able to eliminate 100% of the deduction for corporate jets which in many cases is ordinary and necessary. I wouldn't expect the next four years to be any different because he hasn't learned how to work across party lines and will just issue more executive orders.
Posted by: twardcpa | October 4, 2012 10:31 AM
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To move a plant overseas a company would incur expenses such as shipping and moving equipment, expenses of relocating employees, transportation cost etc... These would all be deductible as ordinary business expenses. I beleive this is what the President was referring to. I would think someone in the business for 44 years would know moving expenses are deductible!!!!
Posted by: Paulette Holder | October 4, 2012 9:53 AM
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Moving expense is currently a legitimate deduction for corporations. My interpretation of the President's remarks is that he would make expenses to move a corporation's facilities out of the USA a non-allowed deduction.
Posted by: LynnD | October 4, 2012 9:19 AM
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A deduction for moving a plant overseas?? If you say something enough times you eventually will convince some people of the truth in what you are saying. Last night was the first time in over 4 years anyone has challenged the President with tough questions. Without a monitor and left to defend his record the result was there for all to see.
Posted by: bob from elgin | October 4, 2012 9:14 AM
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Difficulty with the new Accountant will be that Mitt Romney as he changes his tax plan so frequently on the fly rather than stand by it will provide immeasurable quantum of alternative workings and ultimately the poor Accountant will be blamed by Mitt Romney that the Accountant is incompetent and is not helpful to middle-income voters. All the campaign episodes led by Romney comes to this final and neat nightmare for an American voter: Who is the real Mitt Romney as he changes his skin every other time he comes to speak or debate?
Accountant beware please!!
CA.Vallabhdas Raichura
North Potomac: October 4, 2012.
Posted by: VALLABHDAS | October 4, 2012 9:08 AM
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I don't care that much for Big Bird .but i do care about PBS take some of the so call news stations off that do not report facts or news ,but sit coms. Please explain to me a deduction for taking a plant overseas. Look, I've been in business for 44 years. I have no idea what the President is talking about.{If this is true than the Big Bird is the current President and yes than we should do away with that Bird but save Public Broadcasting System. Ron D
Posted by: Ron D | October 4, 2012 8:12 AM
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What! a deduction for taking a plant overseas. Look, I've been in business for 44 years. I have no idea what the President is talking about. Can someone out there in the Accounting World Educate me? CEO of Accounting Business Service Ronald Dochter ,CSA,RTRP
Posted by: Ron D | October 4, 2012 7:57 AM
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