Obama campaign: Romney, Perry tax plans help wealthy, hurt those who work

A new Obama campaign memo slams Texas Gov. Rick Perry's and former Massachusetts Gov. 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 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."
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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. "