Romney unveils new tax plan
Mitt Romney, trying just days before Michigan's crucial Republican presidential primary to establish himself as the candidate best prepared to turn around the economy, Wednesday unveiled a detailed plan for recovery that cuts taxes dramatically.
The cornerstone of the plan is to impose a permanent across the board 20 percent cut in marginal income tax rates. That would return the current top rate, now 35 percent, to 28 percent. He reiterated an earlier campaign pledge that families with annual incomes of less than $200,000 would pay no taxes on income from capital gains, interest and certain dividends.
Such rates, he said Wednesday, will "create powerful incentives for Americans to save and invest, while spurring business investment and economic growth."
Among Romney's other ideas:
--Eliminating the estate, or death, tax.
--Repealing the alternative minimum tax.
--Cut the corporate tax rate to 25 percent. --Make the research and development tax credit permanent.
Part of how Romney would pay for these changes are dramatic cuts in federal spending. He has proposed reducing spending to 20 percent of Gross Domestic Product, down from the current 24 percent, by 2016.
He says he'll save $500 billion with such steps, which would include a repeal of the 2010 federal health care law and allowing stetes to decide how to use federal money for several p rograms, notably Medicaid, the health program for low income and some disabled people.
He provides few details about Social Security and Medicare changes, saying that he would "gradually raise the retirement age" and index the growth in benefits for higher-income beneficiaries to inflation, rather than wages. And he repeated an earlier pledge to set up a "premium support system" for younger workers, where they could choose among competing private plans for their senior care.
