ROMNEY'S TAX FREE SAVINGS PLAN A BOON FOR MIDDLE CLASS
October 8, 2007
Republican presidential candidate Mitt Romney's tax-free savings plan would change the tax rate on interest, dividends, and capital gains to zero percent, allowing middle class Americans whose combined salary and investment income is $200,000 per year or less to save and invest tax-free.
According to the campaign:
- Some 95 percent of American households earn less than $200,000 a year and therefore stand to reap tangible benefits from the proposal.
- If such a policy had been in place in 2005, 56 million taxpayers who earned interest, 28 million taxpayers who earned dividends and 23 million taxpayers who earned capital gains would have paid zero taxes on their savings and investments.
- In 2004, the median income for a family of four fell into the $50,000 to $75,000 tax bracket -- and that income group paid over $796 million in capital gains taxes; under the Romney plan, that income group would have paid nothing.
Romney's plan also offers help to homeowners and would-be homeowners:
- Tax-free savings will assist current homeowners in meeting their mortgage payments.
- It will also accelerate the rate at which future homeowners can save for their first down payment.
Additionally, the policy ushers in opportunities for millions more to join the more than half of adult Americans who already participate in the stock market. The plan essentially says to Americans not currently in the stock market, 'Come play: You can keep what you win.' This powerful participation incentive will pay significant dividends both for individual investors and the economy at large, say observers.
Source: Doug Wilson, "Romney's tax free savings plan a boon for middle class," Townhall.com, October 8, 2007.
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