(CNN) - A new Obama campaign memo slams Rick Perry's and Mitt Romney’s tax proposals, leveling a charge that’s now a campaign theme: the rich will benefit at the expense of the middle class if a Republican claims the White House in 2012.
The memo, by Obama campaign policy director James Kvaal, charges that under both Romney's and Perry’s tax plans, “the most fortunate Americans would pay less while the middle class would pay a higher share.” It describes their economic plans as “far right," draws parallels to proposals by congressional Republicans, and repeatedly charges that those who make money by investing wealth will prosper while those who live off of “work” will suffer. It’s a version of the warrior-for-the-middle-class message the president has been repeating since he began selling his jobs plan earlier this year.
The memo comes the same day Texas Gov. Perry unveiled his plan for a flat tax. In a Wall Street Journal op-ed, Perry says his plan will let taxpayers choose between “a new, flat tax rate of 20% or their current income tax rate. The new flat tax preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually, and it increases the standard deduction to $12,500 for individuals and dependents..” It would also eliminate the tax on Social Security benefits.
Steve Forbes, perhaps the best known flat-tax advocate, endorsed Perry, and in an appearance on Fox News praised the plan’s “radical simplicity” insisting it will “make it worthwhile to invest in America again, drastically simplifying the tax code, lowering the corporate tax rate.”
The Obama campaign’s memo suggests it is people in Forbes’ very privileged tax bracket who will most benefit from the Perry flat tax. In the memo Kvaal argues that in general flat-tax proposals “eliminate all taxation on capital gains and other investment income so that the wealthiest who generate much of their income from investments rather than work see huge gains.”
The memo charges the Perry tax plan “radically restructures the tax system and shifts a greater tax burden onto the middle class.” And it suggests the Perry plan is likely to eliminate popular deductions and exemptions including those “that are essential to middle class security like health insurance, home mortgages, charitable contributions and child care.”
Perry is set to outline his tax plan in a speech in South Carolina later Tuesday.
Team Obama is no more forgiving of the Romney plan. First they hit him for an apparent flip-flop, pointing out in 1996 Romney called Steve Forbes’ flat tax a “tax cut for fat cats” and this year has said, “I love a flat tax.” The Romney campaign provided a more complete transcript of Romney’s recent remarks in praise of the flat tax, which reveal he went on to express reservations that this kind of tax disproportionately hits middle income Americans.
The meat of the Obama team’s criticism is a populist message that Romney’s plan would likely “shift the tax burden onto the middle class.” Obama policy director Kvaal attacks Romney’s proposal to slash the corporate tax rate 10% from 35% to 25% because unlike the president’s plan it doesn’t also end loopholes and deductions which, Kvaal argues would “ensure that corporations continue to contribute their fair share of taxes.”
The Obama team also takes issue with Romney’s proposal to eliminate the estate tax. And it takes issue with Romney’s proposal to eliminate taxes on capital gains, dividends and interest for taxpayers who earn less than $200,000 a year.
Newt Gingrich also objected to this part of the Romney proposal in a recent Republican debate, arguing that it eliminates capital gains taxes for people who typically don’t have money in investments. Romney’s defense was an appeal to the same group the Obama campaign is targeting, the middle class.
Romney said, in part: “The reason for giving a tax break to middle-income Americans is that middle-income Americans have been the people who have been most hurt by the Obama economy.….I'm not worried about rich people; they're doing just fine. The very poor have a safety net; they're taken care of. But the people in the middle, the hard-working Americans, are the people who need a break, and that's why I focus my tax cut right there. “
The problem with the flat tax is that people who have less end up paying more of what they need to spend on little things like food and utilities. The wealthy may pay the same percentage, but they have more that they can spend overall.
The flat tax will hurt the economy and it will especially hurt a majority of the people. If I was making much more money than I am currently, I would favor the flat tax, but it will be a disaster. Especially with the current fragile economy. Can and Perry are playing politics and not using sound judgement. Also, BEWARE! They both want to do away with Social Security. Just think about it before supporting the flat tax!
You have to agree, the president has accomplished a lot of things when he did not have to get permission from the filibustering party of "No." Case in point, President Obama has had a host of foreign policy victories. From the Somali pirates, the elimination of a number of al Qaida leaders, including bin Laden and Alwaki, the success in Libya, and the removal of troops from Iraq. While most media played the events down and extreme right wing media ignored them, in the words of a local car dealer, each one of these is "hew-JAAH." (huge) It makes you wonder what our economy and job picture would be if the republicans did not obstruct and fight him every step of the way.
More of tax the middle class and let the rich slide – it's getting very old!
I told this long time ago. I define flat tax again, it is a tax that is levied for the benefit of rich and for the detriment of the poor., whereby, notwithstanding any thing happens hereinafter the introduction of such tax, Rich pay less tax, and poor of America pay more. I further tell to this beloved nation in such a way, Yes, bringing corporate tax down will bring foreign nation's companies back into America, but here what happens, they bring cheap labor too., and influence again on our political system, nevertheless it is not new with GOP and tea thugs, So it further messes the system, lot of illegals will prevail....God bless this beautiful nation. Obama2012.
Obama is right about this. If you are middle class and you have a family, you will suffer a lot under the flat tax plan. I did the math. I would definitely vote against anyone who came forward with a plan like that.
Ya' darn tootin, they do.
Republicans must think the American people are complete suckers. Or maybe, just maybe, they have played the same game of sucker for so long that the people are finally getting wise to it. What took 'em so long?
For god's sake where should on earth be a flat tax??? We don't receive flat income, why should we go for flat tax?
I do think we should go for PAYE = Pay As Your Earn. as simple as that!
Getting economists to agree on anything is virtually impossible. But one thing they ALL agree on is that the capital gains tax is the most destructive and counterproductive system of taxation in the world. It puts curbs on economic liquidity that income taxes and vat/sales taxes do not. Democrats ignore this fact, and stand by their "principles" that these are taxes on the wealthy. Not true, but nice to run on.