After more than 20 debates and endless speeches, you would think voters would have a clear grasp of where GOP presidential frontrunners Rick Santorum and Mitt Romney stand on key issues. But, despite the constant campaign-trail chatter and position papers, the two candidates’ views on matters ranging from taxes to immigration to foreign policy are still works in progress. The Fiscal Times sifted through pronouncements and platforms, including Romney’s major economic proposals last week, to come up with this consumer-friendly guide to their positions.
Romney portrays himself as the champion of the middle class. He would cut marginal income tax rates by 20 percent across all six income brackets, dropping the highest income tax rate to 28 percent from 25 percent—a change he says would help unincorporated small businesses boost their receipts, increase wages and increase investment.
Romney would also slash the top corporate tax rate from 35 percent to 25 percent, and would help offset the cost of his overall tax plan with spending cuts, closing corporate tax loopholes, and implementing means testing of Social Security and Medicare. He would also slowly shift the U.S. to a territorial system of taxation, whereby foreign earnings are exempt from U.S. taxes.
His sop to the middle class would be to do away with the estate tax, the Alternative Minimum Tax, and taxes on capital gains, interest, and dividends for individuals making less than $200,000 a year, although middle and lower income families have far less in interest and dividends to write off than the rich. However, those who earn above $200,000 would still be subject to the current 15 percent investment income tax. “We are going to cut back on [deductions] so we make sure the top 1 percent keeps paying the current share they’re paying or more,” Romney said.
Under Santorum’s approach, the corporate tax rate would plummet from 35 percent to 17.5 percent, and domestic manufacturers would pay no income tax at all. On the individual side, two income tax brackets of 10 and 28 percent would replace the current system of six brackets, and deductions for home mortgage interest, charitable donations, retirement savings, and health care would remain intact.
However, Santorum would add new incentives to promote marriage and the family, including tripling the personal deduction for children and ridding the tax code of marriage penalties. Like Romney, he would eliminate the Alternative Minimum Tax and the estate tax. However, he would lower the capital gains rate for all Americans from 15 percent to 12 percent, instead of doing away with it as Romney proposes, for those making less than $200,000.