After a flurry of attack ads in the past two weeks, President Barack Obama this week released a TV ad in which he spoke directly into the camera and discussed how his policy approaches differed from Mitt Romney’s. He cited taxes as one area where they had different philosophies. Obama said, “Gov. Romney’s plan would cut taxes for the folks at the very top.”
We’ll check whether this is an accurate characterization of Romney’s plan.
Romney has posted some key elements of his tax plan on his campaign website. Here’s a summary of the provisions for individual taxpayers:
• Cut marginal rates by one-fifth on a permanent, across-the-board basis
• Eliminate interest, dividend, and capital gains taxes for taxpayers with an adjusted gross income below $200,000
• Eliminate the estate tax
• Repeal the Alternative Minimum Tax
To analyze the Romney tax cut, we turned to the Urban Institute-Brookings Institution Tax Policy Center, an independent think tank that evaluates the tax proposals submitted by presidential candidates. The Tax Policy Center looked at two versions of Romney’s tax proposal. We will use the analysis of the more recent of Romney’s two plans, which the group published in March 2012.