JUDY WOODRUFF: With fewer than 100 days to go until the November election, President Obama and Governor Romney spent today campaigning in battleground states, trading barbs on taxes and the economy.
For the president and his Republican challenger, the day's stage was a pair of key states, and the intended audience, the middle class.
Mitt Romney stumped in Golden, Colo., his first campaign event since returning from a weeklong overseas trip. Romney argued again that the president's policies have failed the middle class.
MITT ROMNEY (R): Now, I know he will be able to speak eloquently and describe all the great things he's doing and what he's going to do, but look at the results.
And you look at the results, and it's been a disappointment. His policies have not worked. They have not got America back to work again. I understand that it's small businesses that create jobs in America, that people create jobs, not government, and I'm going to get America working again.
(CHEERING AND APPLAUSE)
JUDY WOODRUFF: The Romney campaign also went up with a new television ad highlighting economic troubles in Florida, ahead of the president's visit there today.
NARRATOR: But under President Obama, 8.6 percent unemployment, record foreclosures, 600,000 more Floridians in poverty. He focused on Obamacare, instead of jobs. Barack Obama, what a disappointment.
JUDY WOODRUFF: The Obama campaign countered with its own new ad. It attacked Romney for paying just 14 percent of his income in taxes in 2010, and charged his tax reform proposal favors the rich.
NARRATOR: Now he has a plan that would give millionaires another tax break and raises taxes on middle-class families by up to $2,000 a year. Mitt Romney's middle-class tax increase -- he pays less, you pay more.
JUDY WOODRUFF: The president hit that same theme during an event this afternoon in Orlando.
PRESIDENT BARACK OBAMA: They have tried to sell us this trickle-down tax cut fairy dust before.
PRESIDENT OBAMA: And guess what? It didn't work then. It will not work now. It is not a plan to create jobs. It is not a plan to reduce the deficit. It is not a plan to build our middle class. It is not a plan to move our economy forward.
JUDY WOODRUFF: Mr. Obama again highlighted a study by the nonpartisan Tax Policy Center that concluded Romney's proposal would provide large tax cuts to high-income households and increase the tax burdens on middle- and/or lower-income taxpayers.
But Eric Fehrnstrom, a top Romney adviser, called the report -- quote -- "a joke" and raised questions about its impartiality and methodology. The sharpened debate on tax fairness underscores the importance both campaigns have placed on middle-class voters.
A recent NBC News/Wall Street Journal poll gave Mr. Obama a 16-point lead on Romney when it comes to who would better look out for the middle class.
For a closer look at what exactly is in the Romney tax proposal at the heart of this political fight, we turn to Bill Gale of the Tax Policy Center. He is a co-author of the report in question. And Scott Hodge of the also nonpartisan Tax Foundation, he has a different read on the Romney plan.
And, gentlemen, we thank you both for being with us.
BILL GALE, Tax Policy Center: Thank you.
SCOTT HODGE, Tax Foundation: Thank you.
JUDY WOODRUFF: So, Bill Gale, to you first.
Just quickly, how do you respond to the Romney adviser who called this assessment a joke and he questioned its impartiality and methodology?
BILL GALE: Well, first thing, let's be clear. That's a shoot-the-messenger kind of answer.
If they had a substantive response to our analysis, I presume that they would make a substantive response. Last fall, when we put out analysis of the other Republican candidates' tax options, the Romney campaign liked our analysis a lot and said very nice things about us. So it seems like their opinion of us depends on whether we're reporting on what they do or what someone else does.
JUDY WOODRUFF: Well, Bill Gale, let me ask you what in a nutshell did the Tax Policy Center conclude about where the tax burden falls, assuming the Romney plan were enacted -- tax plan?
BILL GALE: Well -- thank you.
We did a very straightforward exercise. We said, Governor Romney wants to cut rates by 20 percent. He doesn't want to raise the rate on capital gains or dividends or other saving investments. But he wants his reform to be revenue-neutral.
That means you have to raise the revenue somewhere else. We took the most optimistic way, the most progressive way to raise that revenue. And we showed that, even under those circumstances, there would be a big tax cut for high-income households and a tax increase for middle-income households.
JUDY WOODRUFF: That's boiling it down to a great degree. But...
BILL GALE: Yes, and what I want to emphasize is it's a matter of arithmetic. It is not some incredibly fancy calculation.
It's simply that, if you cut tax rates for high-income households, you lose so much revenue there, that you can't make it up by shutting down the tax exemptions that high-income tax households have.
JUDY WOODRUFF: So, Scott Hodge, what do you make of this analysis from the Tax Center?
SCOTT HODGE: Well, I think you have to be fair and what Bill and the Brookings have done is, I think, a pretty reasonable assessment.
But you have to understand that it is not an analysis of the Romney plan. The -- Romney has only set out some very, very broad parameters in terms of tax policy, in terms of cutting the individual rates, all of them by 20 percent, cutting the corporate rate by 10 percentage points.
But what Brookings did was actually fill in a lot of this unknowns with their own assumptions and then analyzed it. So this is not technically an analysis of the Romney plan. It is one option for how to get from here to there.
There are many ways in which Romney could fill out the details of his plan. They of course are not forthcoming with that, because they would like to keep to a big-picture approach. So we have to be very careful about reading too much into this, because it really is not the Romney plan.
JUDY WOODRUFF: All right, so filling in a lot of assumptions, what about that?
BILL GALE: Let me respond to that.
It's correct that Governor Romney has not specified all the details of his tax reform plan. He has specified the goodies, the tax cuts, but he's not specified how he will pay for them. If he would do so...
SCOTT HODGE: He may not even pay for them. He may decide that we are going to scrap revenue neutrality.
BILL GALE: No. Well, he has said he wants it to be revenue-neutral.
JUDY WOODRUFF: Revenue-neutral, meaning money is not raised -- that taxes are not raised.
BILL GALE: Exactly, meaning, on net, the average tax cut is zero.
So we took the options that he said he wanted. And then, when we filled in how to pay for that, we did that in a way that -- that fills it in most by taxing high-income households, OK? So if Romney wants to finance his tax cuts with spending cuts, that's going to be even more regressive, because spending cuts go largely to low- and middle-income households.
So we -- we made what is the most optimistic assumptions in the filling-in part, and still came out to the conclusion that I mentioned.
JUDY WOODRUFF: What about that explanation?
SCOTT HODGE: Well, one of the most interesting aspects of the study is that it really confirms how progressive our current income tax system is.
And what the study unfortunately doesn't show is that about half of all Americans pay no income taxes whatsoever. And the vast majority of income taxes are paid by the top. In fact, a recent CBO study shows that the top 20 percent of taxpayers pays 94 percent of all income taxes.
And so, they are correct. It's mathematically impossible to cut all tax rates without somewhat benefiting the rich, because the rich are the only ones paying income taxes. Meanwhile, we have half of all Americans paying no income taxes whatsoever and benefiting from about $100 billion of refundable tax credits, even though they pay no income taxes.
So, we're going to have to have a big decision here on tax reform. Do we put some of those non-payers back on the tax rolls, and how many should avoid paying taxes?
JUDY WOODRUFF: What other -- what more information would you have needed, Bill Gale, in order to make a fuller, a more complete analysis of the Romney plan?
BILL GALE: Well, he -- the governor would simply have to specify how he wanted to pay for the rate cuts that he wants.
He had specified that he doesn't want to raise dividend and capital gains tax rates. But he hasn't specified any other way of paying for the tax cuts.
JUDY WOODRUFF: And what's your sense of why he hasn't done that?
SCOTT HODGE: Well, because, the more details you put out there, the more room that you have for others to shoot holes in it.
And I think what wants to do -- and I'm not a surrogate for the Romney camp, by any means -- I think what they are trying to do is stay to the big picture and talk about the bigger issues here and that their belief is that when you cut marginal tax rates, you see economic growth.
And they have a lot of research behind their belief in that. And I think that that is the message that they are trying to...
JUDY WOODRUFF: Does that show up in your analysis, that there's more...
BILL GALE: We do have some behavioral responses. And we did analysis allowing a growth effect.
The growth effects of revenue-neutral tax reform can be vastly overstated. Congressional Budget Office, Joint Committee on Taxation has done analysis showing relatively small effects. In 1986, we had a big revenue-neutral tax reform. We didn't get a big growth effect out of that.
And the answer is because the net -- the reason why is that the -- essentially, the average marginal tax rate doesn't end up changing that much in a revenue-neutral reform.
JUDY WOODRUFF: Respond to that.
SCOTT HODGE: Well, there are lots of ways to get from here to there.
And if you designed it in one way, you are going to get poorer results. If you design it in a more pro-growth manner, you can get vastly better outcomes.
JUDY WOODRUFF: Bill Gale, do you at the Tax Policy Center plan to do an assessment of the Obama tax reform plan?
BILL GALE: We have done assessments of the president's budget every year when it comes out, in fact, assessments that are much more detailed than and extensive than this particular paper that came out yesterday.
We have done estimates of the Republican candidates' tax reform plans. We will continue to estimate anything we can get our hands on, basically.
JUDY WOODRUFF: All right, we are going leave it there.
Scott Hodge, we thank you very much with the Tax Foundation.
SCOTT HODGE: Thank you very much.
JUDY WOODRUFF: Bill Gale with the Tax Policy Center.
Gentlemen, thank you.
BILL GALE: Thank you.
JUDY WOODRUFF: And you can watch both candidates in action on the campaign trail today. We have posted their full speeches on our Politics page.