Governor Romney wants to cuts to cut tax rates by 20 percent, and President Obama has given him lot of grief about it. But, it turns out, President Obama wants to cut tax rates, too. What’s up with that?
Romney’s plan is to cut individual income tax rates by 20 percent, and avoid reducing revenues by cleaning up the tax code. He also says his policy is to leave the distribution of the tax burden roughly unchanged. Clear enough. The devil’s in the details, but Congress will have a substantial say in how those details are determined.
Now the president’s new booklet, “The New Economic Patriotism: A Plan for Jobs and Middle Class Security,” says he wants to bring corporate income tax rates down, on a revenue-neutral basis.
So, both men agree that cutting tax rates is the way to go and that it is important not to increase the budget deficit in the process. The big difference is that Romney wants to cut rates for individuals and corporations. Obama wants to cut tax rates only for big corporations, while raising tax rates for individuals and many small businesses.
These are the basic facts. They are not in dispute, but they do raise an obvious question: Why does President Obama think lower tax rates are vital to the strength and competitiveness of America’s biggest corporations, and yet higher tax rates are suitable for America’s real job creators — small businesses?
Does the president have a bias toward big business and a disdain for small business? That’s hard to believe, though it is clearly suggested by his policies. Then again, it’s always hard to make sense out of this president’s economic policies if the idea is to increase jobs and grow the economy.
— J. D. Foster is the Norman B. Ture Senior Fellow in the Economics of Fiscal Policy at The Heritage Foundation.