It’s an especially touchy subject when consumers are sick of pinching pennies after years of a down economy, and the question of taxes and spending caused a storm of bickering at Tuesday night’s presidential debate.
When a woman named Mary asked Mitt Romney his positions on various tax deductions — including the mortgage deduction, the child tax credit and the education tax credit — the former Massachusetts governor said he wanted to simplify the tax code and lower taxes for the middle class. Romney added that he would limit deductions and exemptions for people with higher incomes, and allow taxpayers to claim up to $25,000 in deductions. And, he said, middle-class taxpayers would no longer pay taxes on dividends, capital gains or savings.
“Why am I lowering taxes on the middle class? Because under the last four years, they've been buried, and I want to help people in the middle class,” Romney said in the debate at Hofstra University. “And I will not -- I will not under any circumstances -- reduce the share that's being paid by the highest-income taxpayers, and I will not under any circumstances increase taxes on the middle class.”
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President Obama also said that he wanted to help those in the middle class reduce their tax burden. He said that he had cut taxes on the middle class by $3,600 and cut taxes for small businesses 18 times. But, he said, to reduce the deficit, people who made more than $250,000 would have to pay a higher tax rate.
“I'm ready to sign that bill right now. The only reason it's not happening is because Gov. Romney's allies in Congress have held the 98% hostage because they want tax breaks for the top 2%,” he said, as Romney sat on a stool nearby.
Obama then went on the attack, something he was criticized for not doing in the first debate. He brought up a “60 Minutes” interview in which Romney was asked if it was fair for him to pay a lower tax rate than a nurse or bus driver, and criticized Romney for changing his positions on taxes from the primaries, when he said he would give tax cuts to everybody, even higher-income Americans.
“When Gov. Romney stands here after a year of campaigning, when during a Republican primary, he stood onstage and said, I'm going to give tax cuts -- he didn't say tax rate cuts; he said tax cuts -- to everybody, including the top 1%, you should believe him, because that's been his history,” Obama said.
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In his rebuttal, Romney brought the debate back to jobs and the economy, a weak spot for Obama.
“Why do I want to bring rates down and, at the same time, lower exemptions and deductions, particularly for people at the high end? Because if you bring rates down, it makes it easier for small business to keep more of their capital and hire people.” Romney said.
When moderator Candy Crowley tried to settle the argument, Obama continued his attack, arguing that Romney’s tax plan would add to the deficit, rather than reduce it, and that the lack of specifics in the plan is an obstacle.
“But when he's asked, how are you going to do it, which deductions, which loopholes are you going to close, he can't tell you,” Obama said. “Now, Gov. Romney was a very successful investor. If somebody came to you, governor, with a plan that said, here: I want to spend 7 [trillion dollars] or $8 trillion, and then we're going to pay for it, but we can't tell you until maybe after the election how we're going to do it, you wouldn't have taken such a sketchy deal.”
Crowley took that question back to Romney, asking if he would look again at tax cuts if his plan didn’t add up. He didn’t let her finish the question.
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“Well, of course they add up. I was -- I was someone who ran businesses for 25 years and balanced the budget. I ran the Olympics and balanced the budget. I ran the -- the state of Massachusetts as a governor, to the extent any governor does, and balanced the budget all four years,” he said. “I know what it takes to balance budgets. I've done it my entire life.”
When Obama tried to argue with that answer, Crowley tried to move the discussion along, but Romney got the last word in.
“I just described to you precisely how I do it, which is with a single number that people can put -- and they can put their deductions and credits .…” he was saying, when Crowley again took control of the ship and steered it away from the choppy waters.
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