Countdown to Election 2012: The Candidates’ Proposals to Fix the Economy

By Eileen Lohmann

On November 6, the people of the United States will choose between two fundamentally different presidential candidates, and in an economic climate in which the rate of unemployment is 7.8 percent, each candidate has offered his own solution to create jobs and grow the economy.

President Barack Obama’s plan to revitalize the economy involves investing in education, research, and technology to create jobs; reforming the tax code to create jobs and pay down the deficit; ending the war in Iraq and using the money saved to rebuild the country; investing in clean energy; and increasing access to college education.  Former Governor of Massachusetts Mitt Romney has proposed a “Five-point Plan” to create jobs by achieving energy independence; ensuring access to good teachers and higher education and focusing job training programs; curtailing other countries’ unfair trade practices; reducing spending, consolidating agencies, and shifting responsibility for some programs to states; and championing small business.

To accomplish these goals, each candidate has suggested an approach to taxation to pay off the deficit and re-grow the economy by creating jobs.  Both candidates have expressed their support of small business.  Obama’s campaign has emphasized the 18 tax cuts that have already been made during his presidency and refers to entrepreneurs and small business as the “backbone of an economy built to last.”  Romney, in his effort to champion small business, has said that he will reduce taxes on small businesses through individual and corporate tax reform.

Both Obama and Romney seek to reduce the corporate tax rate.  Obama has stated that he wants to lower the tax rate on manufacturers to 25 percent, but would reduce the tax rate on all other corporations from 35 percent to 28 percent.  More information found here.  Romney has said he plans to lower the corporate tax rate to 25 percent.  He has also proposed switching to a territorial corporate tax system, which would render foreign profit by U.S. businesses exempt from taxation in the U.S.  More information found here.

In response to the problem of businesses outsourcing American jobs to other countries, Obama promises to remove the tax benefits that encourage corporations to outsource and to create incentives for businesses to bring jobs back to America.  According to the Tax Policy Center, the territorial tax system Romney advocates would help U.S. multinationals that compete abroad in low-tax nations.  However, Obama has argued that eliminating taxes on American companies’ foreign profits through a territorial tax system would encourage further outsourcing.

The two candidates have expressed very different views on the issue of labor and workers’ rights.  Obama strongly supports labor unions, and numerous unions have formally endorsed him, while Romney argues that labor unions reduce investment and slow job growth.  Obama passed the American Recovery and Reinvestment Act (ARRA), the largest economic stimulus and jobs program in history; appointed union-side attorneys to the National Labor Relations Board (NLRB) and National Mediation Board; and issued five pro-worker Executive Orders.  More information found here and here.

In implementing his labor plan, Romney would make new appointments to the NLRB, amend the National Labor Relations Act (NLRA), and reverse President Obama’s executive orders that “tilt the playing field toward organized labor.”  Additionally, he would allow workers the free choice of whether or not to join a union, in part by amending NLRA “to guarantee the secret ballot in every union certification election” and by supporting states’ “right to work” laws.

The two candidates present very different visions for the future, and a Romney presidency would dramatically change the economic landscape of the United States.