Obama either fails to understand the Romney tax plan, or Obama is intentionally deceiving the voters. Here is the plan in a few words that even Obama must understand.
1. All income tax rates are lowered by 20 percent.
2. To be “revenue neutral” and avoid increasing the deficit, “tax expenditures” (exemptions, deductions, tax credits) are cut from presently $1.1 trillion by approximately $400 billion as an offset for the lower tax rates.
3. Which of the countless “tax expenditures” are cut or reduced is determined in the “sausage factory” of Congress in a “distributionally neutral” manner; i.e. no income group gets a tax cut at the expense of another group. With $1.1 trillion to play with, there is especially no need to increase the actual tax burden on the middle class or anyone else.
The money that otherwise goes to the social engineering reflected in “tax expenditures” gets pumped into the private economy at all levels. The lower tax rates incentivize investment. This triggers economic growth, which automatically lowers government spending (e.g. unemployment benefits) and increases tax revenues because the tax base increases as the economy grows.