[h=3]By DAMIAN PALETTA And SARA MURRAY[/h]WESTERVILLE, Ohio—Republican presidential candidate Mitt Romney, seeking to emphasize his deficit-cutting ambitions, is warning Americans that his tax-cut plan might not decrease their tax bills as much as they expect.
Amid a push by the campaign to remind voters of high deficits, Mr. Romney on Wednesday told an Ohio crowd that while he would work for lower tax rates on businesses and individuals, they shouldn't "be expecting a huge cut in taxes because I'm also going to lower deductions and exemptions."
His campaign also has backed away from statements that its plan would preserve most tax deductions for Americans whose adjusted gross income is less than $200,000 a year. Instead, one staff member said, an alternate scenario would lower that income cutoff to $100,000, thus raising revenue by allowing fewer taxpayers to take deductions.The staff member said the campaign hasn't committed to that plan; such a change would affect millions of taxpayers.
The shift comes as the Romney campaign sees an opening among independent voters, who remain deeply concerned about growing levels of government debt. Mr. Romney has long proposed to cut all income-tax rates by 20% and to lower the top corporate tax rate to 25% from 35%, arguing that lower rates will spur economic growth.
But he also has promised to do that without reducing the overall amount of money the government takes in by curbing tax deductions, in order to avoid aggravating the deficit. One criticism of Mr. Romney's plan from budget experts and Democrats has been that it would be hard to cut enough deductions, leading to a sharp drop in tax revenue and higher deficits.
Highlighting his resolve to tackle rising federal debt, Mr. Romney stood Wednesday before a giant electronic sign showed that the U.S. government's obligations now surpass $16 trillion.
The Romney campaign sees this backdrop as a powerful draw for independent voters, who tend to express their concern about the deficit. In the most recent Wall Street Journal/NBC News poll, 30% of independent voters said their biggest concern with President Barack Obama was that he significantly increased federal spending and raised the federal debt. That concern even topped job creation among independents.
At the Republican National Convention in Tampa last month, Mr. Romney placed more emphasis on the tax-cut aspects of his economic plan. He said it focuses on "reducing taxes on businesses, not raising them." Similarly, last week he told reporters that "I want to lower taxes on middle-income people."
For weeks, President Obama has seized on outside estimates that Mr. Romney's plan to lower tax rates could lead to a drop in revenue of about $5 trillion over 10 years, which would expand the deficit considerably.
"My opponent and his running mate are big believers in top-down economics," Mr. Obama said in Ohio Wednesday. "They basically think that if we just spend another $5 trillion on tax cuts that favor the very wealthiest, then … prosperity and jobs will rain down on everybody else. The deficit will magically go away, and we will live happily ever after."
Mr. Romney's response to those charges had been hamstrung in part because he hasn't specified which deductions he might eliminate to ensure that tax revenue doesn't fall. In addition, his advisers have assumed that the economic growth that would stem from tax cuts also would raise revenue, lessening the impact on the deficit.
But in recent days, Mr. Romney has worked to clarify that his plan wouldn't actually cut tax revenue, at least not much, thereby not affecting the deficit as much as Democrats allege.
Mr. Romney's edge on the debt argument comes as recent polls show he is losing his advantage over Mr. Obama on tax issues. That may be a sign that the president's attacks on Mr. Romney's tax plan—Mr. Obama has argued his opponent is pushing tax cuts for millionaires and billionaires—is resonating.
"What we're proposing is a tax reform, it's not a tax cut," a Romney campaign staffer said, adding that the bulk of new limits on tax deductions is still expected to target the upper end of the income scale.
"There are elements of our plan that we believe will give middle-income taxpayers relief," the aide said. But the staffer pointed to Mr. Romney's plan to waive taxes on interest and dividends for some taxpayers, instead of the 20% cut in rates for all Americans.
Write to Damian Paletta at [email protected] and Sara Murray at [email protected]
Amid a push by the campaign to remind voters of high deficits, Mr. Romney on Wednesday told an Ohio crowd that while he would work for lower tax rates on businesses and individuals, they shouldn't "be expecting a huge cut in taxes because I'm also going to lower deductions and exemptions."
His campaign also has backed away from statements that its plan would preserve most tax deductions for Americans whose adjusted gross income is less than $200,000 a year. Instead, one staff member said, an alternate scenario would lower that income cutoff to $100,000, thus raising revenue by allowing fewer taxpayers to take deductions.The staff member said the campaign hasn't committed to that plan; such a change would affect millions of taxpayers.
The shift comes as the Romney campaign sees an opening among independent voters, who remain deeply concerned about growing levels of government debt. Mr. Romney has long proposed to cut all income-tax rates by 20% and to lower the top corporate tax rate to 25% from 35%, arguing that lower rates will spur economic growth.
But he also has promised to do that without reducing the overall amount of money the government takes in by curbing tax deductions, in order to avoid aggravating the deficit. One criticism of Mr. Romney's plan from budget experts and Democrats has been that it would be hard to cut enough deductions, leading to a sharp drop in tax revenue and higher deficits.
Highlighting his resolve to tackle rising federal debt, Mr. Romney stood Wednesday before a giant electronic sign showed that the U.S. government's obligations now surpass $16 trillion.
The Romney campaign sees this backdrop as a powerful draw for independent voters, who tend to express their concern about the deficit. In the most recent Wall Street Journal/NBC News poll, 30% of independent voters said their biggest concern with President Barack Obama was that he significantly increased federal spending and raised the federal debt. That concern even topped job creation among independents.
At the Republican National Convention in Tampa last month, Mr. Romney placed more emphasis on the tax-cut aspects of his economic plan. He said it focuses on "reducing taxes on businesses, not raising them." Similarly, last week he told reporters that "I want to lower taxes on middle-income people."
For weeks, President Obama has seized on outside estimates that Mr. Romney's plan to lower tax rates could lead to a drop in revenue of about $5 trillion over 10 years, which would expand the deficit considerably.
"My opponent and his running mate are big believers in top-down economics," Mr. Obama said in Ohio Wednesday. "They basically think that if we just spend another $5 trillion on tax cuts that favor the very wealthiest, then … prosperity and jobs will rain down on everybody else. The deficit will magically go away, and we will live happily ever after."
Mr. Romney's response to those charges had been hamstrung in part because he hasn't specified which deductions he might eliminate to ensure that tax revenue doesn't fall. In addition, his advisers have assumed that the economic growth that would stem from tax cuts also would raise revenue, lessening the impact on the deficit.
But in recent days, Mr. Romney has worked to clarify that his plan wouldn't actually cut tax revenue, at least not much, thereby not affecting the deficit as much as Democrats allege.
Mr. Romney's edge on the debt argument comes as recent polls show he is losing his advantage over Mr. Obama on tax issues. That may be a sign that the president's attacks on Mr. Romney's tax plan—Mr. Obama has argued his opponent is pushing tax cuts for millionaires and billionaires—is resonating.
"What we're proposing is a tax reform, it's not a tax cut," a Romney campaign staffer said, adding that the bulk of new limits on tax deductions is still expected to target the upper end of the income scale.
"There are elements of our plan that we believe will give middle-income taxpayers relief," the aide said. But the staffer pointed to Mr. Romney's plan to waive taxes on interest and dividends for some taxpayers, instead of the 20% cut in rates for all Americans.
Write to Damian Paletta at [email protected] and Sara Murray at [email protected]