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Romney plan calls for middle class tax cuts, sanctions on China

GOP contender unveils a broad economic plan

By Matt Viser
Globe Staff / September 7, 2011

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NORTH LAS VEGAS, Nev. - Mitt Romney, in a wide-ranging proposal that goes to the heart of his presidential campaign, yesterday called for a reduction in corporate taxes, new sanctions on China over its currency practices, and the elimination of some taxes on the investments made by middle-class Americans.

In what was billed as a major policy address at a truck dealership here, the former Massachusetts governor offered his most detailed prescription for the economy as he seeks to fend off Governor Rick Perry of Texas and cast himself as the candidate with the business skills to nurse the country’s ailing economy back to life.

Romney is also attempting to control the terms of the debate ahead of a major Republican forum tonight at the Reagan Library in Simi Valley, Calif. - and just two days before President Obama delivers his own speech on the economy before a joint session of Congress.

“We should have a job-creating machine in America,’’ Romney said yesterday. “Growth is the answer. Not government.’’

Waving an iPhone that he had pulled out of his pocket, he declared: “President Obama’s strategy is a pay-phone strategy in a smart-phone world.’’

Many of Romney’s policy ideas reflect long-held Republican orthodoxy and in some cases are proposals that he himself has already put forward. Both before and after his speech, Romney’s opponents, as well as Democrats, pounced on the notion that Romney should be considered the jobs candidate in the race.

“As governor of Massachusetts, Mitt Romney failed to create a pro-jobs environment and failed to institute many of the reforms he now claims to support,’’ Perry spokesman Mark Miner said. “Governor Perry has the strongest pro-jobs record and best philosophy to get America working again.’’

Romney’s plan, outlined in a 33-minute address and a 160-page book distributed ahead of his speech, suggests that, if elected, he would submit a jobs package on his first day in office consisting of five proposals, from reducing corporate income taxes to consolidating federal job retraining programs. Romney’s policy advisers project that the plan would create 11.5 million jobs over four years, lowering the unemployment rate to 5.9 percent and steering the country back to 4 percent annual growth.

Romney also made a concerted effort yesterday to appeal to middle-class Americans, and proposed eliminating taxes on interest, dividends, and capital gains for individuals earning less than $200,000 a year. His campaign declined to say how much the proposal would cost the government in lost revenue.

“It should be good to be in the middle class in America,’’ Romney said. “You shouldn’t have to worry about how you’re going to meet your bills, how you’re going to afford college for your kids.’’

Romney’s plan does not offer a specific proposal on the marginal income tax rates, committing only to keeping them at current levels and to “explore opportunities’’ to lower them. His advisers said Romney would keep the Bush-era tax cuts in place.

Romney yesterday also called for reducing the 35 percent corporate income tax rate to 25 percent; implementing free trade agreements with Colombia, Panama, and South Korea; and directing the Department of the Interior to work with energy companies to survey energy reserves and lease all areas currently approved for exploration.

Romney says he would also attempt to severely limit any new federal regulations and would significantly expand areas available to energy companies, including drilling in the Gulf of Mexico and Alaska.

He would immediately cut non-defense spending by 5 percent, reducing the federal budget by $20 billion. He would also cap spending at 20 percent of the Gross Domestic Product.

Romney reiterated that he would work to repeal President Obama’s health care law, as well as the Wall Street reform law co-authored by Representative Barney Frank of Newton.

Romney’s attempt to cast himself as an economic maestro is already drawing fire from his Republican opponents. As an indication of the perils for Romney, one of his rivals yesterday began challenging the former governor and his record as a job-creator in Massachusetts. Former governor Jon Huntsman of Utah aired an ad that sought to draw attention to the Bay State’s low ranking as a job creating state during Romney’s term.

Romney announced his economic policy team , which consists of R. Glenn Hubbard, dean of the Columbia Business School, who was chairman of President Bush’s council of economic advisers from 2001 to 2003; Gregory Mankiw, an economics professor at Harvard University who was chairman of President Bush’s council of economic advisers from 2003 to 2005; former senator Jim Talent of Missouri; and former representative Vin Weber of Minnesota.

Matt Viser can be reached at maviser@globe.com.