Report: Romney's tax plan would save him $5 million next year

Former Massachusetts Gov. Mitt Romney would save almost $5 million next year alone if he is elected president and able to enact his tax policies, according to a new report.

Nonprofit research groups Citizens for Tax Justice, which leans left, and the Tax Foundation, which leans right, compared President Barack Obama's proposed tax policies to Romney's and found that both men would pay less if the Republican candidate wins in November -- but the current president's potential savings amounted to a more modest $90,000.

"There's quite a difference at higher incomes between the Obama and Romney plans," Tax Institute researcher Gil Charney told The Associated Press. "Obama is looking at the rich — millionaires and billionaires — as a source of additional revenue to the government, where Romney is looking at them as a potential spark for economic growth."

Even if he is able to convince Congress to close tax loopholes, Romney, who has a net worth of about $250 million, would save himself about $3.5 million by lowering tax rates by 20 percent, which disproportionately benefits the wealthy, and repealing Obama's health care reform law. But experts predicted that Romney's savings could be even greater because they doubted the candidate would target many of the loopholes.

"You'd have to get rid of the vast majority of deductions and credits in the tax code to make it work, including some sacred cows like the mortgage interest deduction, child tax credit, etcetera," Tax Foundation analyst Nick Kasprak explained.

On the other hand, Obama has suggested raising tax rates and limiting deductions for people making over $250,000. He has also supports the so-called "Buffett Rule," which would force individuals making $1 million or more each year to pay at least 30 percent in taxes.

Under Obama's plan, Romney's effective rate would be around 34 percent, compared with just 13 percent under his own plan. That's even lower than the 15 percent effective tax rate that he paid on 2010 earnings.

Obama has proposed taxing himself at an effective rate of 28 percent. That would fall to 18 percent if Romney's policies are enacted. The president paid an effective tax rate of about 21 percent last year.

Photo: Flickr/Gage Skidmore