Common Sense: Comparing the Tax Bite With Obama and Romney

Would you pay more or less in tax? And how would that stack up against the richest Americans like Warren Buffett, who’s currently paying a lower rate than his secretary?

Considering how central these issues have been to the campaign, it’s curious how hard it is to come up with answers, perhaps because both candidates want voters to believe that someone’s else’s taxes may have to rise, but not theirs. Whether Mr. Romney’s math adds up and whether taxing the rich would make a dent in the deficit might make an interesting public policy debate, but those issues further obscure the most basic question, which is what effect the proposals will have on each of us.

I’m not saying voters should simply vote their pocketbooks. But I would at least like to know how much I’m being asked to pay and what I might expect in return. This has been especially true since I discovered this year that I paid a rate in federal income tax that’s nearly twice as high as Mr. Romney’s. As I said then, I’m not faulting Mr. Romney for taking advantage of the existing tax code, but that disparity continues to rankle.

Tax reform and the related issue of economic growth have been major themes in the campaign that will end on Tuesday. The economy has taken center stage, and both candidates have been making much of tax platforms that aim to spur growth and job creation while promoting fairness. Mr. Romney has been the more ambitious, calling for sweeping tax reform that would lower rates while broadening the base by limiting unspecified deductions and loopholes. “Tax policy shapes almost everything individuals and enterprises do as they participate in the economy,” he says on his “Mitt Romney for President” Web site.

President Obama has called for a return to the top rates that prevailed in the Clinton administration and higher rates on capital gains and dividends. “We can’t get this done unless we also ask the wealthiest households to pay higher taxes on their incomes above $250,000 — pay the same rate we had when Bill Clinton was president,” Mr. Obama said last month while campaigning in New Hampshire. “We created 23 million new jobs, and we went from a deficit to surplus. That’s how you do it.”

So what would the impact of their tax proposals be? After consulting several tax experts, I did the calculations both on my own returns for 2009 and 2011 as well as for the wealthiest 400 taxpayers.

For the Romney plan, I took the proposals from his Web site that apply to taxpayers with adjusted gross incomes over $200,000: a 20 percent cut in the top rate (to 28 percent from 35 percent); dividends and capital gains taxed at the existing preferential rate of 15 percent; and the abolition of the alternative minimum tax. Mr. Romney hasn’t said what itemized deductions he would abolish or limit, but he has said he might cap or eliminate those deductions for high-income taxpayers.

Mr. Romney has mentioned a cap on deductions of $17,000, and has also said: “One way, for instance, would be to have a single number. Make up a number, $25,000, $50,000. Anybody can have deductions up to that amount And then that number disappears for high-income people,” meaning high-income people would be allowed no itemized deductions.

So in the spirit of Mr. Romney’s comments, I eliminated all itemized deductions. I retained the self-employed health insurance deduction and the deduction for contributions to a qualifying retirement plan. So far as I can tell, Mr. Romney hasn’t proposed abolishing those.

I took Mr. Obama’s tax proposals from his proposed budget and subsequent campaign statements, in which he has called for a return to Clinton era rates of 36 percent (for single taxpayers in roughly the $200,000 to $400,000 bracket) and 39.6 percent for those earning over $400,000 for both ordinary and dividend income and a 20 percent rate on capital gains. While Mr. Obama has talked about repealing the A.M.T., he hasn’t actually proposed doing so and has only suggested indexing it to inflation, so I retained the A.M.T. in the Obama calculations.

I assumed the Obama proposals would raise my rate and the Romney plan would lower it. But the Romney plan actually increased my rate to 25.5 percent from 22.2 percent in 2011, and to 27.6 percent from 26.7 percent in 2009. The Obama plan raised it even more substantially, to 30.6 percent in 2011 and 29.3 percent in 2009.

Including the minimum tax in the Obama plan had a significant impact. If Mr. Obama abolished it, my rate under his plan fell to 29.7 percent in 2011 and to 26.7 percent in 2009 — lower than the Romney plan, in fact, in 2009. If Mr. Romney allowed me the $17,000 in itemized deductions he has mentioned, it would have only a negligible impact, lowering my rates 0.5 percent.

Obama and Romney Hold First Debate

Mitt Romney and President Obama challenged each other on many issues.

DENVER — Mitt Romney on Wednesday accused President Obama of failing to lead the country out of the deepest economic downturn since the Great Depression, using the first presidential debate to invigorate his candidacy by presenting himself as an equal who can solve problems Mr. Obama has been unable to.

President Obama and Mitt Romney squared off on Wednesday night in Denver in the first of three presidential debates.

The president implored Americans to be patient and argued that his policies needed more time to work, warning that changing course would wipe away the economic progress the country is steadily making. The two quarreled aggressively over tax policy, the budget deficit and the role of government, with each man accusing the other of being evasive and misleading voters.

But for all of the anticipation, and with less than five weeks remaining until Election Day, the 90-minute debate unfolded much like a seminar by a business consultant and a college professor. Both men argued that their policies would improve the lives of the middle class, but their discussion often dipped deep into the weeds, and they talked over each other without connecting their ideas to voters.

If Mr. Romney’s goal was to show that he could project equal stature to the president, he succeeded, perhaps offering his campaign the lift that Republicans have been seeking. Mr. Obama often stopped short of challenging his rival’s specific policies and chose not to invoke some of the same arguments that his campaign has been making against Mr. Romney for months.

At one point, Mr. Romney offered an admonishment, saying, “Mr. President, you’re entitled, as the president, to your own airplane and to your own house, but not to your own facts, all right?” He forcefully engaged Mr. Obama throughout the night, while the president often looked down at his lectern and took notes.

A boisterous campaign, which has played out through dueling rallies and an endless stream of television commercials, took a sober turn as the candidates stood at facing lecterns for the first time. Mr. Obama, who has appeared to take command of the race in most battleground states, seemed to adopt an air of caution throughout the evening that left some of his liberal supporters disappointed in his performance.

“Are we going to double down on the top-down economic policies that helped to get us into this mess,” he said, “or do we embrace a new economic patriotism that says, ‘America does best when the middle class does best’ “?

For much of the debate, the candidates commandeered the stage, taking control away from the moderator, Jim Lehrer of PBS, as they kept trying to rebut one other. At times, the moderator seemed as if he had walked off the stage, a result of new rules that were intended to allow for a deeper and more freewheeling discussion.

On a basic level it was a clash of two ideologies, the president’s Democratic vision of government playing a supporting role in spurring economic growth, and Mr. Romney’s Republican vision that government should get out of the way of businesses that know best how to create jobs.

Mr. Romney sought to use his moment before a prime-time audience of tens of millions to escape the corner Mr. Obama and his allies have painted him into, depicting him as an uncompromising adherent to policies that have been tried before. He instead turned the focus on his opponent’s record.

“You’ve been president four years. You’ve been president four years,” Mr. Romney said at one point. He ticked through a list of promises he said Mr. Obama had not lived up to, and said, “Middle-income families are being crushed.”

Neither candidate delivered that knockout blow or devastating line that each side was hoping for. Still, style points went to Mr. Romney, who continually and methodically pressed his critique of Mr. Obama. The president at times acted more as if he were addressing reporters in the Rose Garden than beating back a challenger intent on taking his job.

Throughout the evening, Mr. Romney escaped Mr. Obama’s attempts to pin him down on which deductions he would eliminate in his tax proposals.