This morning on “Starting Point with Soledad O’Brien,” Sen. Ron Johnson (R-WI) defends the Romney-Ryan tax plan to cut 20% in taxes for all income levels, and argues the math does work to allow that to happen.
“I understand the tax plan and what they’re guaranteeing is the principles of the type of tax reform they’re doing,” Sen. Johnson says. “It’s pro- growth tax reform. So you lower the marginal rates for everybody. But the way you make sure that the people in the higher income brackets don’t have a tax benefit is you broaden their base. You take away or limit their deductions so that you make sure it’s revenue neutral. And you do that as a principle so as Congress is crafting that, you have to negotiate things to do that.”
Soledad pushes Johnson to list what deductions the plan would look to eliminate.
“For individuals, what Governor Romney and Paul Ryan are saying is none of them are off the table. You start limiting those deductions proportion to the rate you lower their marginal tax rate. That is a very pro-growth process,” he says.
“You’re talking about limiting deductions for those in the upper income level so that their tax burden remains neutral, so that they don’t benefit. That’s the principle. You don’t pre-negotiate when you go to Congress.”
Transcript available after the jump
O’BRIEN: Let’s bring in Republican Senator Ron Johnson who is from Wisconsin, just like Paul Ryan. It’s nice to see you. You were watching in the surrogate room.
SEN. RON JOHNSON, (R) WISCONSIN: Right.
O’BRIEN: What was it like back there? Were you yelling at the TV? Were you enthusiastic? Describe it for me.
JOHNSON: People were a little frustrated with Joe Biden’s rudeness, quite honestly. Come on, let Paul answer the question.
O’BRIEN: Republican people –
JOHNSON: Exactly. Well, I think Vice President Biden was under an awful lot of pressure to make up for really President Obama’s very poor performance, so – his failed performance.
My guess is he was appealing to the base. You know, the “Occupy Wall Street” crowd, and maybe that resonated with them. I don’t think that really resonated particularly well with women.
O’BRIEN: When you look at the CNN polls, it shows that it was pretty much a draw, Paul Ryan 48 percent. Joe Biden 44 percent, but of course, the sampling error is plus or minus 5 percent, which would make it right down the middle there.
And then if you look at favorability, same CNN poll shows that you really didn’t move the – the needle on that when it came to people who are watching the debate. So is your analysis that it was a victory for Paul Ryan without I guess totally partisan? Do you think it really was a draw?
JOHNSON: I think Paul did very well. He was measured. He was dignified. He was calm. He was cool, collected. You know, basically coming under assault by Vice President Biden.
O’BRIEN: You say it was an assault?
JOHNSON: It was. I mean, because he does not have a record that’s defendable he just raised his voice, kept continuing to interrupt. It’s very difficult to get your points out when you’re being interrupted all the time.
What was the count, 80 to 100 times, you know, the unofficial count. That’s very difficult to actually make debate points when you are – when your opponent is being so rude.
O’BRIEN: So Martha Raddatz at one point, I thought she started off very strong, getting right into Benghazi, in the middle, she started pressing Paul Ryan about specifics for that 20 percent across-the- board tax cut. I want to play a little bit about how that went.
(BEGIN VIDEO CLIP)
RYAN: So what we’re saying is, deny those loopholes and deductions to higher income taxpayers, so that more of their income is taxed, which has a broader base of taxation –
BIDEN: May I translate?
RYAN: So we can lower tax rates across the board. Here’s why I’m saying this.
BIDEN: Hopefully I’m going to get time to respond.
RADDATZ: You’ll get time.
RYAN: We want to work with the Congress to help us to achieve this. That means successful.
RADDATZ: With no specifics.
RYAN: What we’re saying is lower tax rates 20 percent. Start with the wealthy, work with congress to do it.
RADDATZ: You guarantee this math will add up?
(END VIDEO CLIP)
O’BRIEN: So, they keep guaranteeing this math is going to add up, but never actually giving specifics and sort of saying well, we’re going to open it up to Congress, but not actually giving specifics. I actually thought this was one of the weaker points for Congressman Ryan.
JOHNSON: No, I understand the tax plan and what they’re guaranteeing is the principles of the type of tax reform they’re doing. It’s pro- growth tax reform. So you lower the marginal rates for everybody.
But the way you make sure that the people in the higher income brackets don’t have a tax benefit is you broaden their base. You take away or limit their deductions so that you make sure it’s revenue neutral.
And you do that as a principle so as Congress is crafting that, you have to negotiate things to do that.
O’BRIEN: Jane Doe taxpayer. I’m like what deductions will you kill? I want to know. Just name three or what deductions are not off the table? What do I not have to worry about?
JOHNSON: For individuals what Governor Romney and Paul Ryan are saying is none of them are off the table. You start limiting those deductions proportion to the rate you lower their marginal tax rate. That is a very pro-growth process because marginal tax rates create the incentive –
O’BRIEN: Child care credit could be cut. So my mortgage deduction could be cut because that actually is a problem, no details.
JOHNSON: A child care credit in upper income individuals generally don’t qualify. You’re talking about limiting deductions for those in the upper income level so that their tax burden remains neutral, so that they don’t benefit. That’s the principle. You don’t renegotiate going into –
O’BRIEN: But as you know – but people go all the time, this is my plan. Here’s what I want. I believe it you go with a principle, but you also go with very specific strategy.
JOHNSON: They have pretty specific parts of their plan where –
O’BRIEN: Pretty kind of but not really?
JOHNSON: Listen, when you’re specifically saying you want to – your goal is to lower marginal tax rates 20 percent across the board, and for lower income and middle income individuals you’re going to eliminate all taxes on income on investment income.
You’re going to make sure that you, you know, eliminate the death tax, the AMT, those are very specifics and then you give congress the broad principle for people making $200,000 or above, those households, make sure that as you craft the compromise, that, that part of the tax reform remains neutral.
O’BRIEN: Analysis, as you know, says it does not, the math does not add up.
JOHNSON: No, that is one, honestly, very partisan analysis. Six other analysis have said that it is entirely possible and the point that Paul’s trying to make is in the past when you’ve actually lowered marginal tax rates.
It’s produced more revenue. Ronald Reagan, six years during his tax reform we went from $600 billion to $1 trillion worth of revenue. That’s a 67 percent increase.
Even George Bush’s tax cuts, in 2003, federal revenue was a little under $1.8 trillion before the housing vote, $2.5 trillion. That’s a 42 percent increase in revenue to the federal government. Lowering marginal tax rates is incentivizing.
O’BRIEN: I hear you on that. But what people are taking exception to is without details, as a taxpayer, and what’s on the table and what’s off the table, it’s a very easy way to throw out numbers without necessarily being having to be responsible for the math working out.
I mean, I thought Martha Raddatz did a very good job on this. She’s sort of like you’re not again going to give specifics and Chris Wallace – JOHNSON: You are giving specifics as you’re giving directions to Congress. This is what CEOs do. Listen, as you design this, make sure that people making $200,000 will not have their tax burden lowered.
But we’re going to lower their marginal tax rate because that produces incentives for them to invest in business, to grow our economy and create jobs.
For people making less than $200,000, lower their tax rates that will be so pro-growth it will be made up in terms of economic growth. That’s how you increase revenue to the federal government, the old- fashioned way by growing your economy.
That is what this president does not understand. He doesn’t understand how the private sector works. So his – his choice, and this is why this is such a stark contrast in this election, President Obama had a choice to make when he came into this – into the presidency.
By the way, the recession had bottomed out. We weren’t in free-fall. In the second quarter, we only gave up 0.7 GDP growth by the third quarter of his presidency. We were already in recovery. It’s his policies that have made that recovery so anemic because his choice was, I’m going to grow government, which has increased the debt burden on our grandchildren by $5.4 trillion.
Scared consumers, scared investors, Mitt Romney, Paul Ryan, conservatives understand what we need is pro-growth tax reform, incentivise small businesses, medium size businesses to invest, expand their business, create jobs. That’s the balanced approach. Grow revenue the old-fashioned way by growing the economy.
O’BRIEN: I know Democrats would disagree with every single thing you said.
JOHNSON: They’re wrong. And President Obama has been proven wrong. Look at the anemic results of his recovery.
O’BRIEN: And we are out of time. As you know, they would say consistent slow and anemic, but consistent recovery. Sir, we’ve got to stop.
JOHNSON: Give me more time next time.