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Obama vs. Romney 101: 5 ways they differ on taxes

President Obama and challenger Mitt Romney agree on the need to overhaul the federal tax code to produce a simpler tax system with lower rates. But they disagree on whether tax reform should also increase government revenues. Here are five tax issues on which they differ.

4. Estate tax

Mary Altaffer/AP
Republican presidential candidate Mitt Romney (r.) listens as his running mate, Rep. Paul Ryan (R) of Wisconsin, speaks at the Long Family Farm, Orchard & Cider Mill on Aug. 24 in Commerce, Mich. Romney supports ending the estate tax, in part to protect family-run businesses.

  • By Mark Trumbull Staff writer

Romney wants to repeal the estate tax. Obama says that's a bad idea.

Obama's idea is to reinstate the 2009-level estate tax, with a 45 percent estate tax rate after a $3.5 million exemption on assets passed to heirs. Supporters of his policy say the tax affects only about 0.3 percent of all estates. They say it can make a significant contribution to federal deficit-reduction, without harming job creation or incentives to save and invest.

"While repealing the estate tax might lead some people to save more, it also would lead the government to borrow more to offset the lost revenue," the liberal Center on Budget and Policy Priorities argued in a 2009 primer on the subject.

Romney argues for repeal. In its tax-policy agenda, the Romney campaign says the tax "encourages the most complicated and convoluted tax-avoidance schemes at tremendous cost to all involved." Also, "it can have catastrophic effects when a small family-owned business, in the course of passing to the next generation, creates tax liabilities that the family cannot meet without breaking up the business itself."

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Mark Sappenfield
Editor

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