Romney muddies his tax message

Mitt Romney has muddied his message on the GOP’s signature issue of taxes at a time of growing frustration in the party about the direction of his campaign.

Now struggling in the polls, the Republican nominee said this week that President Obama had not raised taxes and downplayed the tax relief in his own proposal. Both statements left some on the right dumbfounded.

“It’s not a particularly compelling message to tell people you’re not going to see much of a tax cut, at least in the way most people think of tax cuts,” said Jim Pethokoukis of the American Enterprise Institute, noting that Romney’s plans would offset rate cuts with the elimination of tax deductions.

Conservatives were already concerned that Romney has not effectively sold his vision on taxes and the economy to voters, and questioned why the nominee hadn’t responded more forcefully to accusations that his tax plan would hurt the middle class. 

Then Romney seemed to shift his messaging Tuesday when he said Obama hasn’t raised taxes while in the White House.

“I admit this, he has one thing he did not do in his first four years — he’s said he’s going to do [it] in the next four years — which is to raise taxes,” Romney said.

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But Romney’s own campaign and conservative groups such as Grover Norquist’s Americans for Tax Reform argue Obama has raised a slew of taxes, including the healthcare mandate that the Supreme Court ruled was a tax. 

A campaign spokeswoman later stressed that Romney was referring only to the George W. Bush-era rates.

Romney followed that up on Wednesday by warning voters to keep their expectations in check about his promise to cut income tax rates by 20 percent, noting that deductions and credits will have to be eliminated to make that possible.

“By the way, don’t be expecting a huge cut in taxes, because I’m also going to lower deductions and exemptions,” Romney said. “But by bringing rates down, we’ll be able to let small businesses keep more of their money, so they can hire more people.”

Both remarks seemed off-key for a party that has made a commitment to lower taxes central to its political identity, and to its case against Obama’s reelection.

Adding to the confusion, a surrogate for Romney’s campaign, Kevin Hassett of the American Enterprise Institute, said this week that Romney would choose not to fully follow through on his rate cuts if he couldn’t find enough preferences to limit or eliminate. 

Larry Kudlow, a prominent supply-side commentator, said he was flabbergasted by Romney’s remark that voters shouldn't expect huge tax cuts in his administration.

"Lower marginal tax rates. Higher middle-class take-home pay to offset lost income under Obama. More family financial resources. More growth and more jobs," Kudlow wrote on cnbc.com. "This doesn’t have to be so hard."

Kudlow added that he was assured by the campaign that Romney was not pulling back on his tax-cut message. "I’m willing to give Mr. Romney a mulligan. But I’ll say this: The growth message has to be crystal clear for the debate next Wednesday night," Kudlow wrote.

Amanda Henneberg, a spokeswoman for Romney’s campaign, told The Hill in a Thursday statement that the candidate had made the need for tax reform “crystal clear." The campaign also published a blog post saying that Romney and his running mate, Rep. Paul Ryan (R-Wis.), would give taxpayers the certainty that Obama never has.

“He will continue to make that case to the American people and offer a real alternative to the job-destroying policies of President Obama,” Henneberg added. 

The Obama campaign, meanwhile, is trying to flip the script on Republicans by pounding Romney over his comments about the 47 percent of Americans who don’t pay income taxes and see themselves as “victims.”  

Democrats say their party’s message that the GOP wants to cut taxes on the rich at the expense of the middle class is breaking through. Sen. Charles Schumer (D-N.Y.) has crowed that Democrats have ended the GOP’s three-decade advantage on taxes.

Romney’s tax plan, which he beefed up in the middle of the heated GOP primary, calls for an across-the-board 20 percent cut in income tax rates. He has said that his proposals would not add to the deficit, nor would they serve as a tax cut for the rich.

But the Urban-Brookings Tax Policy Center, in a study frequently cited by the Obama campaign, questioned whether Romney could follow through on his proposals without shifting some of the tax burden to the middle class. 

Conservatives have urged Romney to respond to the attacks by laying out more clearly what he would do if he took over the Oval Office, in addition to taking aim at Obama’s time there.

Citing recent polling, Pethokoukis said voters don’t appear to have as good a grasp on what Romney would do over the next four years as they do with Obama. 

“For nearing the end of September,” he said, “that’s not a success.”

Analysts across the political spectrum have pointed to the presidential debates, which start next week, as an opportunity for Romney to more clearly lay out his fiscal vision.

Norquist told The Hill on Thursday that Romney has a compelling case to make that, by teaming up with Ryan to rein in entitlements like Medicare, Republicans wouldn’t need to raise taxes on Americans.

The anti-tax crusader, the mastermind behind the pledge opposing tax increases signed by many GOP officials, also joined with prominent conservatives like Karl Rove in urging Romney to more forcefully call out Obama for taking liberties with his proposals.

“It’s a little tough to do, because you’re trying to do this without being too harsh on a president,” Norquist said.

“I think you can play to the fact that Democrats spend too much and tax too much, and I think he will become clearer on that,” added Norquist, who also accused the news media of scrutinizing Romney’s plan more closely than Obama’s.

Others on the right are exhorting Romney to deliver his message more crisply, with less than six weeks to go until Election Day.

“Whatever the economic theory is as to why his tax plan would be good for America — tax bills are lower, it makes businesses more competitive, boosts economic growth, it incentivizes investment and saving,” Pethokoukis said. “Maybe it’s all of the above. But he needs to make it clear.”

John Feehery, a GOP strategist and columnist for The Hill, was even blunter, pointing to Romney’s own low tax rate and saying the candidate needed to tailor his tax message more to the middle class.

“What he needs to be saying is ‘I’m going to pay more, and you’re going to pay less. We’re going to change the tax code so guys like me pay more,’ ” Feehery told The Hill.