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Romney hints at tax changes

April 16, 2012: 11:43 AM ET

One of the biggest knocks on Mitt Romney this election cycle is that his policy proposals have lacked specificity -- especially when it comes to how much the government should tax, and what programs it should spend that revenue on.

But on Sunday, a few new details were revealed as reporters were able to eavesdrop on a closed Romney fundraiser.

We know Romney wants to cut income tax rates by 20% across the board, scrap the Alternative Minimum Tax, eliminate the estate tax and chop the tax rate paid by corporations from 35% to 25%.

All that tax cutting means the government will be taking in far less revenue. Romney has pledged to make up the difference by limiting deductions, exemptions and credits currently available to top-level income earners. But he hasn't lifted the curtain on which deductions he is planning to curtail.

Similarly, Romney has been criticized, even by conservatives, for lofty rhetoric about cuts to government spending that hasn't been accompanied by a substantial list of programs and agencies that will actually receive less funding.

Now the candidate is getting a tiny bit more specific about his plans.

Reporters stationed outside a fundraiser in Palm Beach, including one from the Wall Street Journal, were able to catch part of the candidate's backyard pitch while standing on a sidewalk outside the venue.

According to the Journal, Romney "said he would eliminate or limit for high-earners the mortgage interest deduction for second homes, and likely would do the same for the state income tax deduction and state property tax deduction."

On the spending side of the ledger, the former Massachusetts governor put the Department of Housing and Urban Development, once run by his father, on notice. "That might not be around later," Romney said.

And while the Department of Education might be "a heck of a lot smaller" under a Romney administration, the candidate said he was "not going to get rid of it entirely," the Journal reported.

Even with these additional details, much remains a mystery. On spending, Romney has said he would cap spending at 20% of GDP, immediately reduce non-security discretionary accounts by 5% and pursue a balanced budget amendment. With federal spending currently at around 24% of GDP, that means huge cuts.

On the campaign trail, Romney most often says he wants to cut funding for relatively small programs like Amtrak, the National Endowment for the Arts, foreign aid, the Corporation for Public Broadcasting and Title X family planning.

He does detail a few bigger ticket items, like a 10% reduction in the size of the federal workforce and modification to Medicaid that would turn it into a block grant program.

But those cuts don't add up to anything near his headline goal. The result, at the moment, is an economic policy plan with significant gaps.

There is, of course, a political advantage to maintaining radio silence on these matters. Behind every specific budget cut is a constituency that benefits from government funding. Same thing with eliminating a tax deduction -- that means somebody, somewhere, is paying higher taxes.

On Monday, the Romney campaign said we shouldn't consider the details overheard by reporters to be an official position of the presumptive nominee. Instead, a Romney campaign official told CNN that the candidate was "tossing ideas out" and not "unveiling policy."

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About This Author
Charles Riley
Charles Riley
Reporter, CNNMoney

Charles Riley lives and works in Hong Kong, where he covers markets, economics and other high-impact stories across Asia. He previously worked for CNNMoney in New York and CNN in Washington. He tweets @CRrileyCNN

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