Friday, August 3, 2012

Irony 101: Obama Campaign Ignores Own Tax Creations, Seeks to Recast Romney as a Raiser of Taxes on the Middle Class

President Obama takes the offensive by presenting Mitt Romney’s tax-cutting plan as something that will actually raise taxes on the middle class so the wealthy can pay less. Seizing on a new study, Mr. Obama is trying to convince voters that his opponent will do exactly what he says he will not.

THE SCRIPT A male narrator says: “You work hard. Stretch every penny. But chances are you pay a higher tax rate than him. Mitt Romney made $20 million in 2010 but paid only 14 percent in taxes, probably less than you. Now he has a plan that would give millionaires another tax break, and raises taxes on middle-class families by up to $2,000 a year. Mitt Romney’s middle-class tax increase: He pays less. You pay more.”

ON THE SCREEN Images of families paying bills are juxtaposed with photos of Mitt Romney, including a picture of him with Donald J. Trump’s plane in the background. Superimposed on the images are various numbers making the point of the ad.

ACCURACY Mr. Romney and his wife paid an effective tax rate of 13.9 percent on $21.6 million in adjusted gross income in 2010, a rate typical of households earning about $80,000, because his income came largely from investments, which are taxed at a lower rate than salaries and wages. He has not proposed raising taxes on middle-class families by $2,000 as the ad suggests, but that is what the campaign argues would be the effect of the plan he has outlined, citing a study by the nonpartisan Tax Policy Center of the Brookings Institution and the Urban Institute.

Mr. Romney’s plan would cut income tax rates by 20 percent, among other tax breaks; he promises to make the plan “revenue neutral,” meaning that the lost revenue would be offset so it would not increase the deficit, but has not specified how he would do that.

The study, filling in the gaps, assumed that he would have to eliminate various tax breaks like mortgage-interest deductions that would result in a net tax increase for 95 percent of taxpayers, while the wealthiest 5 percent would pay less. Those in middle-income brackets would pay on average $546 more a year, according to the study, and upper-middle class taxpayers would pay $1,880 more, while the taxes of the richest 1 percent would be cut by $29,282.

Mr. Romney’s advisers said the study was flawed because it did not account for economic growth they believe would be stimulated by a separate plan to restructure corporate taxes and by lowered deficits. And they called the study biased because one of the three co-authors worked for Mr. Obama’s Council of Economic Advisers. Another worked for the elder President George Bush but has publicly supported ending the tax cuts enacted by President George W. Bush in favor of a broader tax code overhaul. The director of the Tax Policy Center, Donald Marron, was a member of the younger Mr. Bush’s Council of Economic Advisers, however.

BOTTOM LINE Mr. Obama is trying to turn the tax argument around. The Supreme Court recently upheld his health care law by defining its penalty for not buying insurance as a tax, and he has supported letting tax rates rise back to their level in the 1990s on income over $250,000. With this ad, he paints his opponent as a tax increaser and skewers him for seemingly favoring the rich over the middle class.

A version of this article appeared in print on August 3, 2012, on page A14 of the National edition with the headline: Obama Campaign Seeks to Recast Romney as a Raiser of Taxes on the Middle Class.

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