(Reuters) - Taxes are moving toward center stage in the run-up to the November 6 U.S. elections and Republican Representative Paul Ryan, tapped to be Mitt Romney's running mate in his challenge to President Barack Obama for the White House, is focusing the conversation.
As chairman of the House of Representatives Budget Committee and an intellectual leader of conservative House Republicans, Ryan's tax policy record is long, more specific in some ways than Romney's, and sharply at odds with Obama's.
None of the candidates, including Ryan, has been very specific on the hardest tax policy question - what to do about tax breaks that benefit millions of Americans in all income brackets, such as the mortgage interest and charitable giving deductions, and the exclusion for employer-provided healthcare.
Here is a look at proposals and comments Ryan has made, as well as Romney and Obama.
Representative Paul Ryan
- Personal income taxes: Ryan's fiscal 2013 budget was approved by the Republican-controlled House in March. It went nowhere in the Senate.
The plan called for two individual income tax brackets: 10 percent for individuals making up to $50,000 a year; 25 percent for individuals making more than $50,000. There are presently six tax brackets, starting at 10 percent and rising in increments to the top rate of 35 percent.
On Tuesday, Ryan said Congress needs to make the tough decisions about tax deductions, credits and exclusions that should be eliminated to raise additional revenue that would be needed to balance out revenue lost from lowering tax rates.
Ryan told Fox News that he and Romney want "to clear up the tax loopholes, get rid of special interest loopholes to lower tax rates for everybody." But he said he did not expect to present a plan soon on which tax breaks should be killed.
He said, "That is something that we think we should do in the light of day through Congress."
- Investment income: Ryan's budget would eliminate taxes on capital gains and dividends.
- Alternative minimum tax: His budget would repeal the alternative minimum tax, enacted so the rich pay some minimum taxes.
- Estate tax: It would eliminate the estate tax.
- Corporate taxes: It would cut the top corporate tax rate to 25 percent from 35 percent. It also calls for a "territorial system" that would largely end U.S. taxation of profits made abroad by U.S. corporations.
Governor Mitt Romney
- Personal income taxes: Romney has called for cutting all tax rates by 20 percent. That would reduce the top rate to 28 percent from 35 percent.
However, in an August 15 interview with Fortune magazine, Romney also said: "We are not going to reduce the share of taxes paid by high-income individuals."
Like Ryan, Romney has not been specific about which tax breaks he favors ending. He told Fortune that high-income individuals would lose tax breaks, but middle income taxpayers would not.
- Investment income: Romney would eliminate taxes on capital gains and dividends for individuals making less than $200,000. These taxes would remain at 15 percent for individuals above the $200,000 threshold.
He wants to eliminate the 3.8-percent investment income surtax for high-income earners that is part of the Obama's healthcare overhaul, as well as end the law itself.
- Alternative minimum tax: Romney would repeal the alternative minimum tax entirely.
- Estate tax: Romney would repeal the estate tax.
- Corporate tax rates: Romney favors cutting the top corporate tax rate to 25 percent from 35 percent, as well as a territorial system for U.S. corporate profits earned overseas.
President Barack Obama
- Personal income taxes: Obama would keep tax rates the same for families making less than $250,000 annually. For families earning more than that, he would raise the top two tax brackets to 36 percent and 39.6 percent. The highest tax rates have been 33 percent and 35 percent for the last 11 years.
Obama in February offered a long list of corporate tax breaks he wants to end, ranging from accelerated depreciation and inventory accounting to interest on overseas profits and various tax provisions benefiting oil and gas companies.
Like Romney and Ryan, however, Obama has not presented clear plans for dealing with the much larger, middle-class tax breaks.
- Investment income: Obama wants to raise the tax rate on dividends to match the ordinary income tax rate for the two highest income brackets. He would boost capital gains taxes from 15 percent to 20 percent for that group.
Private equity and other financiers would see a portion of their compensation, known as "carried interest," taxed as ordinary income, a change from the 15 percent rate they pay now.
- Alternative minimum tax: Obama has endorsed the "Buffett rule," named for billionaire investor Warren Buffett. It would require households making more than $1 million a year to pay at least 30 percent of their income in taxes.
- Estate tax: Obama backs restoring the 45 percent estate tax level after a $3.5 million exemption imposed on assets passed to heirs. The current estate tax level is a 35 percent tax after the first $5 million.
- Corporate tax rates: The president would lower the top corporate rate to 28 percent from 35 percent. A corporation's foreign profits would be subject to an unspecified minimum tax rate. Businesses would get a 20-percent income tax credit to move operations into the United States while tax deductions for shifting operations abroad would be dropped.
(This version of the story corrects Obama's dividend income tax proposal)
(Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Vicki Allen)
Source: http://news.yahoo.com/factbox-stark-differences-ryan-romney-obama-tax-plans-153140100--sector.html
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