Tax

Conservatives assail Romney tax plan seen as vague

Reuters News
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Posted: Jan 05, 2012 1:08 AM
Conservatives assail Romney tax plan seen as vague

By Patrick Temple-West

WASHINGTON (Reuters) - Even as Republican Mitt Romney's presidential campaign gains momentum, some conservative groups are voicing frustration with tax proposals they say he has purposely kept vague to try to gain political advantage on an issue that demands bolder action.

Heading into the New Hampshire primary next Tuesday after eking out a win in the Iowa caucuses, Romney has provided so few details on his program that non-partisan tax analysts said they were unable to fully evaluate his positions.

On his campaign website, Romney's plan is summed up in three paragraphs and seven bullet points. Two Republican challengers, Rick Perry and Newt Gingrich, have laid out ambitious flat tax proposals, which conservatives have applauded.

Rick Santorum, who came in a close second in Tuesday's Iowa vote, offers a 12-point plan on his website.

Conservative groups such as Club for Growth and the Cato Institute said Romney had stayed vague to avoid getting pinned to right-wing tax principles in a primary race that could limit him in a general election fight with President Barack Obama.

"Basically, he's just keeping the status quo" with a tax plan that "could be much more bold," said Chris Chocola, a former Indiana congressman and president of Club for Growth, a conservative advocacy group pushing for lower income taxes.

The strategy risks reinforcing concerns among Republicans that the former Massachusetts governor, despite his denials, lacks core convictions.

"Romney is not a risk-taker necessarily when it comes to policy," Chocola said. "That's a problem with him. You don't know what he's ultimately going to do."

Daniel Mitchell, senior fellow at the conservative Cato Institute, said Romney "is probably even more insincere than the average politician." Whatever Romney says on taxes, "I wouldn't believe anyhow," he said.

Asked for a reply to such criticisms, Romney spokesperson Andrea Saul directed Reuters to the tax section on the campaign website.

FEW DETAILS

Despite 14 debates last year and months of campaigning, Romney has offered few details on his tax proposals.

He has called for making permanent the sweeping tax cuts first passed under President George W. Bush. These were extended by Obama and Congress through 2012.

Romney has urged corporate tax reform, including a top 25 percent corporate rate, down from 35 percent, and a transition to a "territorial" system. He has called for ending the estate tax, as well as eliminating capital gains and dividend taxes for those earning less than $200,000 a year.

Grover Norquist, the Washington crusader whose pledge not to increase taxes Romney has signed, called Romney's plan "the least aggressive" of the candidates' tax packages but acknowledged Romney's reticence was "interesting strategically."

The Tax Foundation, a non-partisan, business-oriented think tank, gave Romney a "C-minus" grade on his tax agenda. Perry earned a "B" for his tax plan and Gingrich got a "C-plus." Plans were graded based on their "sound tax policy."

Only Santorum did worse, receiving a "D-plus" score from the Tax Foundation. His plan was criticized by conservatives for favoring special-interest constituencies like manufacturing businesses and families with several children.

So far Romney "has felt that he can live with a milquetoast plan," said Scott Hodge, president of the Tax Foundation. He characterized the Romney tax platform as "very bland" and "uninspiring."

Cato's Mitchell accused Romney of not taking a firm position against a value-added tax (VAT), which Mitchell said is a favorite tax option of Europe and U.S. liberals.

The Wall Street Journal reported last month that Romney refused to rule out a VAT in an interview with the newspaper. The United States does not have a VAT.

GENERAL ELECTION

A detailed Romney tax blueprint will only come out if he is challenged in the primaries by a conservative with more aggressive tax reform aims, said Howard Gleckman, a resident fellow at the Tax Policy Center, a non-partisan think tank.

"If (Romney) can breeze through the nomination process without being pressed, I suspect he's not going to get very specific," Gleckman said.

The Tax Policy Center is expected to release an analysis of Romney's tax plan this week, Gleckman said. The number-crunching has been delayed by a lack of details, he said.

The center has already analyzed the tax plans of Republicans Rick Perry, Newt Gingrich and former candidate Herman Cain.

Just months ago, Cain's "999" tax plan dominated the campaign. Perry and Gingrich followed suit with flat-tax plans, but Romney did not. By skipping lightly over the tax issue, Romney avoided pinning himself down, both in the primary campaign and, looking ahead, in the run-up to the November general election.

By avoiding specifics on taxes, Romney - himself a multimillionaire businessman - likely has his sights on the general election campaign and defending against Democratic attacks that he means to help the wealthy and Wall Street.

He could be trying to avoid the sort of scuffle that ensued just before the New Hampshire primary in 2000 when then-Texas Governor George W. Bush had a tax-reduction proposal that promised a $2,000 tax cut for a family of four making $50,000 a year and other details. Bush's rival, Senator John McCain, attacked the Bush tax plan as too big and too slanted toward helping the wealthy.

"Romney will be careful about what he pitches on his tax reform plan because (Obama) is going to aggressively go after him if he includes tax cuts for everyone," said Andrew Busch, currency strategist for BMO Capital Markets and a conservative commentator.

"It would be unfortunate if candidate Romney doesn't put forward an aggressive corporate tax cut plan," he said.

(Reporting by Patrick Temple-West. Editing by Kevin Drawbaugh and Howard Goller)