Transcript: Second 2012 presidential debate, part 1
ROMNEY: Hi, Mary.
QUESTION: Governor Romney, you have stated that if you're elected president, you would plan to reduce the tax rates for all the tax brackets and that you 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 deductions, the charitable deductions, the child tax credit and also the -- oh, what's that other credit? I forgot.
OBAMA: You're doing great.
QUESTION: Oh, I remember.
The education credits, which are important to me, because I have children in college. What would be your position on those things, which are important to the middle class?
ROMNEY: Thank you very much. And let me tell you, you're absolutely right about part of that, which is I want to bring the rates down, I want to simplify the tax code, and I want to get middle- income taxpayers to have lower taxes.
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 $4,300 a family, even as gasoline prices have gone up $2,000. Health insurance premiums, up $2,500. Food prices up. Utility prices up.
The middle-income families in America have been crushed over the last four years. So I want to get some relief to middle-income families. That's part -- that's part one.
Now, how about deductions? 'Cause I'm going to bring rates down across the board for everybody, but I'm going to limit deductions and exemptions and credits, particularly for people at the high end, because I am not going to have people at the high end pay less than they're paying now.
The top 5 percent of taxpayers will continue to pay 60 percent of the income tax the nation collects. So that'll stay the same.
Middle-income people are going to get a tax break.
And so, in terms of bringing down deductions, one way of doing that would be say everybody gets -- I'll pick a number -- $25,000 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 filling that bucket, if you will, of deductions.
But your rate comes down and the burden also comes down on you for one more reason, and that is every middle-income taxpayer no longer will pay any tax on 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 mutual fund or any other kind of investment you have, you don't have to worry about filing taxes on that, because there'll be no taxes for anybody making $200,000.00 per year and less, on your interest, dividends and capital gains. Why am I lowering taxes on the middle-class? Because under the last four years, they've been buried. And I want to help people in the middle-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's spending, the president's borrowing will cost this nation to have to raise taxes on the American people. Not just at the high end. A recent study has shown the people in the middle-class will see $4,000.00 per year in higher taxes as a result of the spending and borrowing of this administration.
I will not let that happen. I want to get us on track to a balanced budget, and I'm going to reduce the tax burden on middle income families. And what's that going to do? It's going to help those families, and it's going to create incentives to start growing jobs again in this country.
CROWLEY: Thanks, Governor.
OBAMA: My philosophy on taxes has been simple. And that is, I want to give middle-class families and folks who are striving to get into the middle-class some relief. Because they have been hit hard over the last decade. Over the last 15, over the last 20 years.
So four years ago I stood on a stage just like this one. Actually it was a town hall, and I said I would cut taxes for middle- class families, and that's what I've done, by $3,600.00. I said I would cut taxes for small businesses, who are the drivers and engines of growth. And we've cut them 18 times. And I want to continue those tax cuts for middle-class families, and for small business.
But what I've also said is, if we're serious about reducing the deficit, if this is genuinely a moral obligation to the next generation, then 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've said is, your first $250,000.00 worth of income, no change. And that means 98 percent of American families, 97 percent 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 percent hostage because they want tax breaks for the top 2 percent.
But what I've also says is for above $250,000, we can go back to the tax rates we had 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 it will be good for job creation.
Now, Governor Romney has a different philosophy. He was on 60 Minutes just two weeks ago and he was asked: Is it fair for somebody like you, making $20 million a year, to pay a lower tax rate than a nurse or a bus driver, somebody making $50,000 year? And he said, "Yes, I think that's fair." Not only that, he said, "I think that's what grows the economy."
Well, I fundamentally disagree with that. I think what grows 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 grows the economy is when we make sure small businesses are getting a tax credit for hiring veterans who fought for our country. That grows our economy.
So we just have a different theory. And when Governor Romney stands here, after a year of campaigning, when during a Republican primary he stood on stage and said "I'm going to give tax cuts" -- he didn't say tax rate cuts, he said "tax cuts to everybody," including the top 1 percent, you should believe him because that's been his history.
And that's exactly the kind of top-down economics that is not going to work if we want a strong middle class and an economy that's striving for everybody.
CROWLEY: Governor Romney, I'm sure you've got a reply there.
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