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Losing the Tax Debate

Romney is behind, but there's time for a turnaround.

12:10 PM, Sep 26, 2012 • By JOHN MCCORMACK
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But growth is the whole point of Romney's plan. And Princeton's Rosen concludes that under "plausible" growth assumptions, Romney's plan would neither require a net tax hike on the middle class or a tax reduction for the rich. "[A] proposal along the lines suggested by Governor Romney can both be revenue neutral and keep the net tax burden on high-income individuals about the same," Rosen writes. "That is, an increase in the tax burden on lower and middle income individuals is not required in order to make the overall plan revenue neutral."

Rosen concedes that we really don't know how much economic growth tax reform might produce, and we don't know how many deductions Congress will be willing to reduce or nix. What Romney could say is that if Congress can't pare back enough tax loopholes, he's still not going to raise taxes on middle class families, he's still not going to lower taxes on the rich, and he's still not going to add one dime to the deficit. He'd simply lower rates by an amount equal to the reductions in loopholes. In other words, his goal is a 20 percent reduction, but he's flexible and would take a 15 percent reduction to avoid raising middle class taxes or adding to the deficit.

Does the tax debate open up Romney to questions about his own taxes? Sure, but his response is pretty good: He made his money through investment income and Obama has proposed raising taxes on investment income--not to bring in more revenue--but simply "for purposes of fairness." 

That distills the tax debate quite neatly: Obama's more concerned about divvying up the economic pie more equitably than he is about growing the economic pie. Obama is a liberal Democrat more concerned about economic equality than economic opportunity. Romney is trying to reform the tax code, just like Ronald Reagan and the Democratic Congress did in 1986, to grow the economy and create jobs. 

There's no guarantee that Romney will win this debate. But if his campaign continues to evade the issue, it's a debate Romney will surely lose.

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