Presidential debate 101: Does Romney’s tax math add up?
Here’s a closer look at the tax reform proposals that Mitt Romney discussed during Tuesday night's debate. Do President Obama and others have a point in challenging the math?
When Republican candidate Mitt Romney floated some fresh details about his tax reform plan during Tuesday night’s debate, moderator Candy Crowley pressed a question that's on many voters' minds: What if Mr. Romney's numbers don't add up?Skip to next paragraph
"Well of course they add up," was his quick reply.
He didn't elaborate much beyond that. So let's just say that the debate over Romney's tax math – with President Obama not the only one calling his rival's plan "sketchy" – hasn't been settled.
OBAMA VS. ROMNEY 101: 5 ways they differ on taxes
Here’s a closer look at the changing terrain of the tax reform tussle.
Romney affirmed Tuesday night some of the same points he made in Debate No. 1: that his plan doesn't involve tax cuts for the rich, that middle-class families will get some tax relief, and that his plan for a 20 percent reduction in income tax rates could be paid for by limiting tax breaks.
But he appeared to give new detail on how a cap for deductions might work.
"In terms of bringing down deductions, one way of doing that would be ... say everybody gets – I'll pick a number – $25,000 of deductions and credits, and you can decide which ones to use," Romney said in response to a voter question in the town-hall style debate. He specified, "Your home mortgage interest deduction, charity, child tax credit, and so forth, you can use those as part of filling that bucket, if you will, of deductions."
In answering the tax question, Romney also noted, "The top 5 percent of taxpayers will continue to pay 60 percent of the income tax the nation collects. So that'll stay the same."
But by referring to the "top 5 percent," Romney may have changed his definition of the middle class. If he now means that his relief for taxpayers in the middle ends at the top 5 percent, that means in effect that the middle class ends somewhere below $200,000 in adjusted gross income.
In September, by contrast, Romney said, "Middle income is $200,000 to $250,000 and less."
Roughly the top 3 percent of US households have incomes of $200,000 and higher. Romney's other 2 percent would come from the top end of the next group tracked by the Internal Revenue Service, the roughly 10 percent of tax filers with adjusted gross incomes of between $100,000 and $200,000.
So after Tuesday night, where are we in the debate over Romney's tax plan?
Here are some important parts of the answer:
Skeptics of Romney's tax math still abound. Among them is Mr. Obama. Here's an excerpt of what the president said Tuesday night:
"Look, the cost of lowering rates for everybody across the board, 20 percent, along with what he also wants to do in terms of eliminating the estate tax, along with what he wants to do in terms of corporates, changes in the tax code, it costs about $5 trillion.”
Obama continued, “Governor Romney then also wants to spend $2 trillion on additional military programs, even though the military's not asking for them. That's $7 trillion. He also wants to continue the Bush tax cuts for the wealthiest Americans. That's another trillion dollars: That's $8 trillion.... $8 trillion before we even get to the deficit we already have."
According to the nonpartisan Tax Policy Center, Obama is correct about the $5 trillion figure, which refers to a 10-year period. But the other $3 trillion may be unfair to lump in. After all, continuation of the Bush tax cuts is often assumed to occur, when budget experts create "base lines" for forecasting.
Making a Difference