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All Sizzle, No Steak in Romney-Ryan Tax Plan All Sizzle, No Steak in Romney-Ryan Tax Plan

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NJ Daily

All Sizzle, No Steak in Romney-Ryan Tax Plan

Middle-class dream: The mortgage interest deduction.(istockphoto)

photo of Nancy Cook
August 28, 2012

Cut, cut, cut. Oh, and did we mention cut?

That’s the simple message that Mitt Romney and his campaign will send to voters this week when it comes to tax policy. Slash taxes for small businesses, the wealthy, the middle class, and corporations. Only if Romney wins, campaign aides and advisers say, will they offer specifics on how to pay for the proposed cuts.

For now, Romney is planning to frame taxes as a choice about the size of government. “The president has already raised taxes on higher-income people. I doubt he’s going to do it again, so who’s going to pay for all of this?” asks Glenn Hubbard, dean of the Columbia Business School and an economic adviser to Romney. “If you want to tell people a big government is one of the options, you also have to tell them that a big bill is an option.”

 

This is the inverse of Obama’s message that taxing the wealthy to pay for government programs, such as the building and repairing of infrastructure, would boost the economy. It’s also a bet that the slice of the electorate the Republican ticket is wooing is more interested in shrinking the federal government than in Obama’s class-based appeal. Any call for details on tax reform doesn’t mesh with the Romney campaign’s message for the fall.

So the campaign elides specifics. While the candidate wants to streamline the tax code and his party’s platform allows for scrapping the (expensive but politically popular) mortgage-interest deduction as part of a comprehensive tax reform, a senior aide says that Romney would still preserve the break for middle-class families—and that any decision to cut tax breaks or loopholes can wait until after the election. It is Romney’s hope that he and a Republican-controlled Congress could make those tough political calculations together, the
aide added.

The discussion of taxes at the convention will be equally broad. The presentation will start with Romney’s call for a more constrained government before moving on to the perils of excessive spending and regulation and then to the need for tax reform. The convention’s general theme is the Romney-Ryan vision, aides say, and the reasons Romney is the right candidate to tackle the economy.

Although the campaign’s unwillingness to cite details makes political sense, it also postpones a conversation on overhauling the tax code. That means voters must put faith in the Republican Party when it comes to deciding which tax breaks to scrap. A handful of bipartisan deficit-reduction commissions have already found those sorts of choices to be politically wrenching.

Nor will the campaign provide any specifics between now and November to counter a nonpartisan Tax Policy Center analysis, which showed that Romney’s plan would ease the burden on the wealthy while raising taxes on middle- and low-income households through reduced breaks.

“You have to repeat a couple of big thematic items throughout a campaign,” says Douglas Holtz-Eakin, an adviser to Republican Sen. John McCain’s 2008 presidential campaign. “There’s no real payoff to offering details, except for the elites or the inside-Washington crowd that clamors for it.”

And that, the Romney campaign believes, is not the audience to covet right now.

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