Earlier in October the following e-mail was sent to us, as a member of National Write Your Congressman, a legislative research group that helps small business people, as well as regular consumers with information on what is happening in Washington D.C.  - Robin Tucker

Obama Vs. Romney on Fiscal Issues   Mr Robin B Tucker,

Fiscal Issues: As the presidential debates continue between Democratic President Barack Obama and Republican candidate Mitt Romney, we are bringing you a brief overview of major policy points each candidate supports concerning Fiscal Issues. President Obama General Philosophy: Economic stimulus now, deficit reduction over the long term. Tax the wealthy to raise additional revenues. Trim military spending, Medicare, federal pensions, and farm subsidies. This litany sums up the Obama administration’s approach to taxes, spending, and the federal deficit as outlined in the President’s fiscal 2013 budget. These policy proposals are part of the administration’s creed of tax fairness and progressivity: mainly, the principle that the wealthy should shoulder a greater burden of taxes than lower-income Americans. When it comes to the budget, the Obama administration is less concerned with reducing the deficit in the short run than with reviving the economy. Taxes: Much of the administration’s rhetoric on taxes involves ensuring that the wealthy pay their “fair share.” In addition to allowing the Bush-era tax cuts to expire for families’ income of more than $250,000 a year, the President would also institute the so-called Buffett Rule, which would limit the amount of deductions that high-income earners can claim and attempt to set up what amounts to a minimum tax rate for millionaires. The President has proposed to reduce the corporate tax rate from 35 percent to 28 percent and give manufacturers a special rate of 25 percent. Obama would also institute a minimum tax on the earnings that multinationals make overseas. Deficit Reduction: When the President unveiled his budget in February, Jeff Zients, the acting director of the Office of Management and Budget, pointed out deficit-reduction measures that he said amounted to more than $5 trillion in savings over 10 years—from the $1.5 trillion in tax increases to the $1 trillion in spending caps from the Budget Control Act to the $850 billion in war savings from the military draw down in Iraq and Afghanistan. The President’s budget does little to reduce spending on Medicare, Medicaid, and Social Security—the biggest drivers of federal spending in the coming decades. Spending: The President’s deputies, such as White House Chief of Staff Jacob Lew, have emphasized that now is not the time for austerity. Obama proposes to increase spending on transportation projects, nondefense research, and teacher training. He also calls for a tax break for manufacturers that bring jobs back to the U.S. and for small businesses that hire new workers. Unlike Romney, he opposes a cap on spending as a share of GDP, arguing that such a cap would restrict the government’s flexibility to increase spending in tough times. Mitt Romney General Philosophy: Although some Republicans have fretted that Romney is a RINO—“Republican in Name Only”— his fiscal proposals tell a different story. In fact, they closely follow conservative thinking, down to his selection of House Budget Committee Chairman Paul Ryan as his running mate and his support for Ryan’s controversial plan that calls for deep cuts in domestic spending, broad changes in Medicare and Medicaid, and lower tax rates, all while protecting defense spending. Romney believes that lower marginal tax rates for individuals and lower capital-gains rates will stimulate the economy, boost economic growth, and lift the country out of its economic doldrums. He says he is the person to lead this turnaround, citing his business background. Taxes:As President, Romney would tackle taxes two ways: reduce rates and overhaul the tax code. In addition to making the Bush-era tax cuts permanent, he has proposed slashing the corporate tax rate from 35 percent to 25 percent; reducing individual income-tax rates by 20 percent across the board; and eliminating the estate tax, the alternative minimum tax, and tax provisions from the 2010 health care law. He would end taxes on long-term capital gains, dividends, and interest for families who earn under $200,000. To pay for such large reductions, Romney has said he would make the tax code less complex by eliminating some yet-to-be-determined breaks. He also proposes to switch to a territorial tax system. Deficit Reduction: To reduce the deficit, Romney would make deep spending cuts and cap federal spending at 20 percent of GDP by the end of 2016—with the goal of eventually bringing it down to between 18 percent and 20 percent—well below its level in recent decades. He has made the country’s mounting debt a key point in his case against Obama. “A prairie fire of debt is sweeping across Iowa and our nation,” he said at a campaign stop in Des Moines, “and every day we fail to act, we feed that fire with our own lack of resolve.” Spending: Many of Romney’s spending proposals echo the budget proposals of his running mate, who is chairman of the House Budget Committee. Like Paul Ryan (R-WI), Romney would cap federal spending; repeal the 2010 health care law; cut the size and salaries of the federal workforce; and turn Medicaid into a block-grant program that would give control to the states, shifting it from an open-ended entitlement and limiting its funding. Romney has said he would follow the House GOP budget and cut non defense discretionary spending by 5 percent immediately.

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