Mitt Romney said Wednesday that his tax plan would maintain or possibly even raise the effective tax rate for the wealthiest of Americans.
Speaking at a pre-debate rally this morning in Arizona, Romney previewed the release of his new tax and economics plan, which he'll detail later this week in a major speech at Detroit's Ford Field. The sneak peek came the same day the Obama administration released its corporate tax reform proposal.
Among the elements of the plan is an across-the-board 20 percent cut in marginal tax rates, which would lower the top rate to 28 percent -- the same maximum rate during President Reagan's time in office.
But in Arizona, Romney suggested his policy might result in a tax hike for the wealthiest of Americans.
"I want to make sure that you understand for middle-income families, the deductibility of home mortgage interest and charitable contributions – those things will continue, but for high-income folks, we’re going to cut back on that, so that we make sure the top 1 percent keeps paying the current share they’re paying or more," he said.
Romney explained that he favors limiting deductions and exemptions, particularly for the wealthiest of Americans, a notion backed up by economic advisers in a subsequent conference call detailing the plan. Advisers to Romney said his tax plan was designed to be revenue-neutral.
The Tax Policy Center estimated earlier this month that the top 1 percent pays an effective tax rate of 20,3 percent on individual income (as a percentage of cash income). That could mean an effective tax hike for the wealthiest, at least on individual income. (Other portions of the Romney plan, such as cuts to taxes on estates or investment-related income, could benefit the wealthy.)
The former Massachusetts governor's reveal on Wednesday comes a day after he said of his tax and spending plan that cutting spending would slow down economic growth. (Pro-growth tax reform is needed to balance out the effects of the cuts, Romney reasoned.)
Taxes were also an issue for Romney during the primary campaign in January, when rival presidential hopeful Newt Gingrich, the former House speaker, demanded that Romney release his most recent tax returns.
Romney did eventually release those returns, which showed that he paid an effective tax rate of around 14 percent, since most of his income came through investments, which is taxed at a lower rate.