Charlie Rose Talks to Mitt Romney
What’s the essential difference between your approach and President Obama’s jobs plan?
The President’s plan is another short-term stimulus effort, akin to throwing a cup of gasoline on embers. What America needs is a more fundamental reform of the foundation of our economy to stimulate growth, investment, and hiring. The plan I’ve proposed is far more fundamental and far-reaching than a mere stimulus.
You’ve defended Social Security and were behind a new health-care plan as governor of Massachusetts. What do you see as government’s role?
The primary role of the government is to encourage the innovation and risk-taking and entrepreneurship of the American people. Of course, government plays a role in establishing regulations that are modern and updated to capture the bad actors but also encourage the innovators. And government can play a role in opening markets for American goods, in maintaining a stable currency, in establishing education systems that provide our people with the skills they need for the jobs of today and tomorrow. So government plays a role, but the role is limited to creating the conditions which allow the private market and individuals to pursue their dreams and thereby build our economy.
Do tax cuts create jobs?
When we tax people—the word tax means to burden—we take away part of their earnings. And if we spend that money on things that are not essential, we make it more difficult for the economy to grow and for people to have good jobs and rising disposable income. So tax cuts, which encourage investment and growth, ultimately lead to more jobs and higher revenues for the government. That’s why I propose a zero income tax for middle-income earners on their savings, meaning there would be no tax on interest, dividends, or capital gains for people earning $200,000 a year or less.
How would you attack the housing market’s problems?
The best way to encourage an increase in housing values is to have more Americans earning better wages and salaries so they can afford to buy houses. An economy with over 9 percent of her people unemployed and with stagnated wages is almost by definition going to have a troubled housing sector. And the best focus is not on bailing people out of housing problems but growing our economy and creating the conditions that lead businesses and entrepreneurs to invest.
Like Obama, you’re calling for more free-trade agreements. Unlike him, you’re calling for sanctions against China. Does that risk a trade war?
Trade is good for America if the trade agreements are created in a way that is mutually beneficial. … [But] if people, as in China, steal our intellectual property, hack into our computer systems, and manipulate their currency to artificially depress the prices of their goods, then we can’t simply sit by and pretend that’s not happening. We must take action against cheaters, or the agreements themselves will work to harm America’s industry and workers.
Both you and the President have talked about lowering the corporate tax rate. He’s talked about removing some deductions at the same time. I didn’t see that in your plan.
On Day One, I lower the rate from 35 percent to 25. And then I note in the plan that I will look to broaden the base. And by broadening the base, I mean eliminating deductions and credits and write-offs, and lowering the rate further.
Corporate America is sitting on a lot of cash. Why isn’t it spending it on inventory and entrepreneurial efforts that would create jobs?
That question is asked by the President from time to time. And anyone who is in the business world chuckles when they hear it because it points out just how far removed President Obama is from understanding how the economy works. Businesses don’t build inventory simply because they have cash. Businesses build inventory because they have customers demanding products. Businesses don’t hire people because they have cash. Businesses hire because they have customers demanding services and products.
With respect, you seem to want to reduce corporate taxes so businesses have more money for creating jobs, even though they already have a lot.
You misunderstand me. The reason for lowering the corporate tax rate is to make our tax rate competitive so that instead of deciding to move their facilities other places, they will decide to maintain facilities and grow them here.