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What are the candidates' plans for tax reform?

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    Part 3 of the second presidential debate

  • Duration 13:17
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-- governor this question is for you it comes from Mary along alana sorry.

Governor Romney.

I'm.

You have stated that if you're elected president.

You would plan to reduce the tax rates for all the tax brackets.

And that she would work with the congress.

To eliminate some deductions in order to make up for the loss in revenue.

Concerning the these various deductions the mortgage deduction.

The a charitable deductions.

The child tax credit.

And also -- what's happening right.

Application you don't -- that -- -- The education credits which are important -- because I have children in college.

For about what would be your position on those things which are important to the middle class -- Thank you very much an -- tea you your apps you write about part of that which is I want to bring the rates down.

I want to simplify the tax code.

And I wanna get middle income taxpayers to have lower taxes.

And and the reason I want middle income taxpayers to have -- lower taxes.

Is because middle income taxpayers have been buried over the past four years.

You've seen as middle income people in this country incomes go down 4300.

Dollars a family.

Even as gasoline prices have gone up 2000 dollars.

Health insurance premiums up 2500.

Dollars food prices up.

Utility prices up the middle income families in America have been crushed over the last four years so want to get some relief to middle income families that's part as part one.

How about deductions -- I got to bring rates down across the board for everybody.

But I -- -- limit deductions and exemptions and credits particularly for people at the high end.

Because I am not gonna have people -- high -- pay less than they're paying now.

The top 5% of taxpayers will continue to pay 60%.

Of the income tax the nation collects.

So that'll stay the same.

Middle income people are getting a tax break.

And so in terms of bringing down deductions one way of doing that would be to say everybody gets a pick at number 25000 dollars of deductions and credits.

And you can decide which ones to use.

Your home mortgage interest deduction charity child tax credit and so forth you can use those as part of -- -- that bucket if you -- deductions but your rate comes down.

And the burden also comes down and you for one more reason.

And that is every middle income taxpayer.

No longer will pay any tax and interest dividends or capital gains.

No tax on your savings.

That makes life a lot easier.

If you're getting interest from a bank if you're getting.

A statement from a a mutual fund or any of that kind of investments you have begun to worry about filing taxes on that because of -- no taxes.

For anybody making 200000 dollars a year and less on your interest dividends and capital gains.

Why -- -- lowering taxes on the middle class because under the last four years they've been buried.

And I want to help people Manila class 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 the president spending.

The president's borrowing.

Will cost this nation to have to raise taxes on the American people not just at the high -- a recent study has shown.

The people in the middle class we'll see 4000 dollars a year higher taxes as a result of the spending and borrowing of this administration.

I will not let that happen.

I'll get -- on track to a balanced budget.

And I'm gonna reduce the tax burden on middle income families.

What second -- do.

Can help those families and it's gonna create incentives to start growing jobs again this country thanks governor.

My -- -- on taxes has been simple.

And that is.

I wanna give middle class families.

And folks were striving to get in the middle class some relief.

Because they have been hit hard over the last decade.

Or less fifteen over the last twenty years.

So four years ago I stood onstage just like this -- -- -- town home -- and I would cut taxes for middle class families and that's what I've done by 3600 dollars.

Let's that I would cut taxes for small businesses where the drivers and engines of growth -- -- him eighteen times and I wanna continue.

Those tax cuts.

For middle class families and for small businesses.

But what -- also said is if we're serious about reducing the deficit.

If this is genuinely a moral obligation to the next generation.

In addition to some tough spending cuts.

We've also got to make sure that.

The wealthy do a little bit more so what I say this your first 250000 dollars -- income.

No change.

And that means 98% of American families 97%.

Of small businesses.

They will not see a tax increase I'm ready to sign that bill right now the only reason it's not happening is because.

Governor Romney's allies in congress have held the 98% -- hostage if they want tax breaks for the top 2%.

But.

What -- also say it is for above 250000.

We can go back to the experts we -- when Bill Clinton was president.

We created 23 million new jobs.

That's part of what took us from deficits.

To surplus.

It will be good for our economy and will be good for job creation.

Now governor Romney has a different philosophy.

He was on sixty minutes just two weeks ago.

And he was asked is it fair.

For somebody like you making twenty million dollars a year to pay a lower tax rate than a nurse or -- bus driver somebody making 50000 dollars in.

And he said yes I think that's fair.

I already said I think that's what grows the economy.

Like fundamentally disagree -- that.

I think -- grow the economy is when you get that tax credit that we put in place.

For your kids going to college I think that grows the economy.

I think what growth the economy is what we make sure small businesses are getting a tax credit for hiring veterans who fought for our country that -- our content.

So we don't have a different -- -- when governor Romney's stance here after a year campaign.

When during a Republican primary he start on stage and said I'm gonna give tax cuts.

You don't take tax rate cuts he's a tax cuts to everybody including the top 1%.

You should believe them.

Because that's been -- history.

And that's exactly the kind of -- down economics that is not -- work if we want a strong middle class and an economy that striving for everybody.

-- around am sure -- federal five.

Your -- they -- you heard what I said about my tax plan.

The top 5% we'll continue to pay 60% as they do today I'm not looking to cut taxes for wealthy people.

I am looking to cut taxes for middle income people.

And why -- I want to bring rates down.

And at the same time lower exemptions and deductions particularly for people -- high end.

Because if you bring rates down it makes it easier for small business to keep more their capital and hire people.

And for me this is about jobs.

I want -- -- get America's economy going again.

54%.

Of America's workers work in businesses.

That are taxed as individuals.

So when you bring those rates down those small businesses are able to keep more money and hire more people.

For me I look at what's happened in the last four years and say this has been a disappointment.

We can do better on this we don't have to settle for.

How many months 43 months with unemployment above 8%.

23 million American -- and find a good job right now.

-- three and a half million more women living in poverty today the when the president took office.

We don't have to live like this we can get this economy going again my five point plan does it.

Energy independence for North America in five years opening up more trade particularly in Latin America cracking down on China when they cheat.

Getting just a balanced budget.

Fixing our training programs for our workers and finally -- -- -- small business I want to help small businesses grow and thrive.

I know how to make that happen.

I spent my life in the private sector.

I know why jobs come and why they go and they're going now because of the policies of this administration.

Governor let me ask the president -- and that what you just said that that the governor says that he is not going to allow.

The top 5%.

Plea was what -- -- to have a tax cut that it will all even out the -- he wants to do is give that tax cut.

To the middle class.

Settled.

No it's not -- and look.

-- the cost of lowering rates.

For everybody across the board 20%.

Along with -- what he also wants to do in terms of eliminating the estate tax along what he wants to do in terms of -- Changes in the tax code that cost about five trillion dollars.

Governor Ronnie that also wants to spend two trillion dollars on additional military programs even though the military is not asking for.

That's seven trillion dollars.

He also wants to continue the bush tax cuts for the wealthiest Americans that's another trillion dollars that's eight trillion dollars.

Now what he -- -- he's going to.

Make sure that this doesn't add to the deficit.

Andy's gonna cut middle class taxes.

But what he's asked.

How are you gonna do what which deductions.

Which loopholes -- gonna close he can't talk.

The fact that he only -- to pay 14%.

On his taxes when a lot of you were paying much higher.

Now he's architect -- off the court capital gains are gonna continue to -- At a lower rate so we -- we're -- -- -- money that way we haven't heard from the governor.

Any specifics beyond big bird and eliminating funding for Planned Parenthood in terms of how -- pays for that.

Now governor Romney it was a very successful investor.

If somebody came -- governor where they plan but said here I wanna spend.

Seven or eight trillion dollars.

And that we're gonna -- for but we can't tell you until maybe after the election how we're gonna do what.

You wouldn't have taken such a sketchy deal.

And you should you the American people.

Because the math doesn't add up.

And and what's at -- here is one of two things either candy.

This blows up the deficit.

Because keep in mind this is just to pay for the additional.

Spending but he's talking about 78 -- -- that's before we even get to the depth that we are yet.

Or alternatively.

It's got to be paid for not only but closing deductions for wealthy individuals.

That -- -- for about 4% reduction in tax rates.

You're gonna be paying for.

You'll lose some deductions.

You can't buy this sales pitch nobody has looked at that serious actually believes it adds up.

To president let me get let me get the governor -- I'm missing governor let's before we get into eight and vast array of club who says what what study says a lot.

If it shouldn't -- up.

If somehow when you get in there there -- -- -- -- tax revenue coming in.

It's somehow the numbers don't add up would you be willing to look again 120%.

-- ahead.

Of course they add up I I was I was someone who ran businesses.

For 25 years and balance the budget.

I ran the Olympics and balance the budget.

I ran the the state of Massachusetts as a governor to the extent any governor Dennis and balance the budget all four years.

What we're talking about math it doesn't add up.

How about four trillion dollars -- deficits over the last four years five trillion.

That's method doesn't add up.

We have we beaten we have a president talking about someone's plan it in a way that's completely.

Foreign to what my real plan is.

And then we have his own record which is we have four consecutive years where he said when he was running for office he would cut the deficit in half.

Instead he's -- that we've gone from ten trillion dollars of national debt.

To sixteen trillion dollars of national debt.

If the president were reelected we go to almost twenty trillion dollars of national debt.

This puts us in a -- degrees.

I know what it takes to balance budgets I've done in my entire life.

So Francis when he says yours is the five trillion dollar cut will know it's not because I'm offsetting some of the reductions with holding down some of the deductions.

Any governor I gotta I gotta -- -- I've -- to have you both -- I understand their estates here again next the empathy but.

I will get run out and I did all right I don't dislike the.

This era that I just described to you precisely how I do -- -- what this a single number that people can put.

And they can put their their their deductions -- already -- another -- that you're the world keeping track or on the issue and Mr.

President.

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