Mitt Romney's Tax-Cut Mulligan?
For some unknown reason, Mitt Romney dialed back his tax-cut plan on Wednesday, the same day new reports showed incomes are dropping.
Last month, median household income fell by about $500, and since Barack Obama became president, income is down over $4,500.
But under Mitt Romney’s 20 percent tax-cut plan, if he truly believes it and follows through with it, a married couple making $70,000 a year would save over $2,000. And take-home pay for a middle-class married couple earning about $140,000 — with their tax rate dropping to 20 percent from 25 percent — would increase by over $7,100. Obama has no such middle-class tax cuts.
So why would Governor Romney tell an Ohio crowd on Wednesday that they shouldn’t “be expecting a huge cut in taxes, ’cause I’m also going to lower deductions and exemptions.” (Read More: Mitt Romney Tells Voters: If I'm Elected, Don't Expect Huge Tax Cuts.)
What is that all about? What kind of message is he sending? Is it pro-growth take-home pay? Or is he pulling back and hedging his bet?
I wrote in my last column about the potential benefits of the Romney plan. And I suggested that Romney should give specific examples of higher take-home pay from his tax cuts. And then I suggested that he draw a red line for middle-income taxpayers, and say “you will not lose you’re your deductions.” In other words, send a true growth message. And make it clear, not muddied.
On Wednesday afternoon, one of the most senior people in the Romney-Ryan camp called me to say that Romney misspoke, and that I should give him a mulligan. This person told me there’s no pull-back on the pro-growth tax-cut message, no new overemphasis on debt, and no departure from the Reagan-Kemp tradition. (Read More: The Reagan in Romney.)
Okay, even though I’m a tennis player, 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. Romney is slipping in the polls. People are confused about his message. He must clarify it. (Read More: Will the Presidential Debates Change Your Vote?)
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.
This doesn’t have to be so hard.
—By CNBC's Larry Kudlow
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