Obama and Romney's economic plans

2012-10-02 14:37

US President Barack Obama and his Republican rival Mitt Romney. (File, AP)

Washington - With US economic growth still soft, job creation and tax plans are at the heart of the ideological battle pitting President Barack Obama against Republican challenger Mitt Romney.

Here are the main points of the candidates' economic planks:

Goals

Obama: Create a million manufacturing jobs by 2016 by encouraging companies to relocate their production operations in the United States through fiscal measures.

Double exports to support employment.

Halve energy imports by 2020 through "green" energy and natural gas development.

Romney: Create 12 million jobs by boosting growth through lower taxes, deregulation, open markets and US oil and gas exploration.

Budget

Obama: Reduce the US deficit by $4 trillion over 10 years, including $2 trillion already enacted. Around $1.95 trillion would come from higher taxes on the wealthy and the end of tax breaks for companies, along with $850bn from the end of the wars in Iraq and Afghanistan.

Romney: Bring federal spending below 20% of GDP, from 24.4% in 2012.

Require a super majority vote in Congress for any tax increase.

Remove unspecified tax breaks to finance a general reduction in taxes.

Replace every two government workers who leave with one new hire for a 10% reduction in government employees.

Align public sector salaries with those of the private sector.

Taxes

Obama: Increase the income limit for the two highest tax brackets to $208 250. The final tax rates would match up with those in place before Obama's predecessor George W Bush (36 and 39.6%).

Increase taxes on capital revenue from 15 to 20% for all.

Reduce taxes on firms from 35 to 28%, down to 25% in some industries.

Implement the so-called "Buffett Rule", applying a minimum tax rate of 30% on individuals making more than $1m a year.

Romney: Make permanent 20% cut in marginal income tax rates across the board. Final tax rates would drop from 10 to 8% for the lowest tax bracket, and from 35 to 28% for those making more than $388 350 per year.

Reduce corporate income tax rates from 35 to 25%. Eliminate taxes for taxpayers with adjusted gross income below $200 000 on interest, dividends and capital gains.

Jobs and training

Obama: Invest in professional education and training programmes, with a goal to become the world leader in terms of the proportion of college graduates by 2020.

Train and recruit 100 000 science teachers.

Launch major infrastructure projects.

Romney: Revamp federal training programmes and decentralise them among the different states.

Create individual training accounts.

Raise the caps on visas for highly skilled foreigners.

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- AFP