JACKSONVILLE, Florida (CNN) - Former Massachusetts Gov. Mitt Romney outlined details of his economic stimulus plan Saturday, saying “the time is now to get ahead of the tipping point.”
Romney’s plan would provide a tax cut of up to $400 to Americans earning less than $97,500 in the last year and would permanently reduce the tax bracket for those people from 10 percent to 7.5 percent. Americans over 65 still in the workforce would pay no payroll taxes.
Romney said his plan differs from the economic stimulus package proposed by President Bush Friday in that the amount of money going back to individual taxpayers is smaller than in the president’s plan, which offers some taxpayers a rebate of up to $1,600 per household. Romney said his plan would “do more on the corporate side trying to encourage the creation of jobs.”
Business owners would be able to expense all equipment for two years and would see a reduction in the corporate tax rate to 20 percent in two years.
Helping homeowners is also on the table. Romney’s plan involves participation by the Federal Housing Administration. The plan would lower the down payment a borrower must make and would push the FHA to expand the borrowing amount it’s able to guarantee.
“There are a lot of homeowners that have taken out home loans, credits on their homes,” Romney said. “If the value of the home continues to go down you will lose the ability of people to buy things and therefore grow the economy.”
Romney’s plan would cost a total of about $233.4 billion, he estimates, which he says would be paid for by the economic growth stimulated by the lowered corporate tax rate and reduced payroll taxes for workers over 65, for instance.
“If the nation goes into a recession, the cost of a recession to the government is a lot larger than the cost of what I’m talking about,” Romney told reporters aboard his campaign plane as he flew from Las Vegas, Nevada, to Jacksonville, Florida.
In outlining the broad details of his plan, Romney also called for reducing the tax rate on interest, capital gains and dividends down to zero for taxpayers earning under $200,000 – something he has advocated in recent days on the campaign trail.
In order for Romney’s plan to have its intended outcome, he says Congress must pass a bill no later than February 19, a month from today.
– CNN's Shirley Zilberstein