Fact Check: Obama Ad Goes After Romney's Economic Plans

By Steve Kanigher

Published 09/20 2012 08:17PM

Updated 09/21 2012 01:11PM

Claim: A new advertisement endorsed by President Barack Obama that is airing on KLAS-TV Channel 8 states in part: "Mitt Romney's plan? A new $250,000 tax break for multi-millionaires. Roll back regulations on the banks that cratered the economy and raise taxes on the middle class."

Verdict: Partly true but mostly misleading. The most accurate aspect of this claim is the part about rolling back regulations on the banks. That's because Republican presidential nominee Romney has said he wants to repeal the Democrat-backed Dodd-Frank Wall Street Reform and Consumer Protection Act, a set of financial regulations imposed in response to the economic downturn. Romney, who doesn't hide his distaste for government regulation, has also said he would replace Dodd-Frank with a more "streamlined, modern regulatory framework," according to his campaign website. But banks alone didn't crater the economy. There are plenty of others to blame, including both major parties in Congress for giving financial institutions the power to issue subprime loans, investors who helped create the housing bubble and consumers who knowingly bought more real estate than they could afford.

Democrat Obama has continuously attacked Romney on studies from the Tax Policy Center, a partnership of the Brookings Institution and Urban Institute think tanks, which claim Romney's tax plan would benefit wealthy taxpayers but hurt lower-income Americans. The center's examination is flawed, though, because Romney hasn't fully disclosed his plan. He has said he would implement a 20 percent across-the-board reduction in marginal tax rates, which would include the middle class. What he hasn't revealed are the tax breaks he would reduce or eliminate in his bid to broaden the tax base. The center's analysis reads similar to a worst-case scenario, making certain assumptions that might not pencil out if and when Romney's plan is fully aired. That said, Romney could help clear the air once and for all by releasing his full plans. Only then can it be argued conclusively whether his plan helps only the wealthy.

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