Obama and Romney clash bitterly on tax policy

White House rivals Barack Obama and Mitt Romney clashed head-to-head over their tax programs in their second debate Tuesday, battling fiercely as they got down into the fine points of policy. The Democratic incumbent accused his Republican opponent of planning to force the middle class to foot the bill for tax cuts for the wealthy, while Romney said tax cuts on savings interest and capital gains would benefit all. "Middle income people are going to get a tax break," Romney said, in response to a question from the audience. "The top five per cent of taxpayers will continue to pay 60 per cent of the taxes that the nation collects." Romney said he would cap tax deductions at 25,000 dollars per year and halt tax on savings and capital gains -- a measure that Obama said would benefit the rich much more than the working poor and middle income families. "Four years ago I stood on a stage just like this one and I said I will cut taxes for middle class families, and that's what I have done, by US$3,600," Obama said, accusing Romney of having a one-point tax cut plan. "If we're going to do tough spending cuts, we have got to make sure that the wealthy do a little bit more," he said. "So what I propose is your first US$200,000 worth of income, no change. That means that 97 per cent of Americans and 97 per cent of small businesses will not see tax increases." Romney reacted furiously. "I'm not looking to cut taxes for wealthy people," he protested. "I am looking to cut taxes for middle income people." Asked whether the governor's vow not to benefit the top five per cent of earners settled the matter, Obama was scornful. "No, it's not settled," he declared. "Look, the cost of lowering rates for everybody ... along with what he also wants to do in terms of eliminating estate tax, along what we wants to do in terms of corporate changes in the tax code, it costs about five trillion. "He's going to make sure that this doesn't add to the deficit and he's going to cut middle class taxes, but when he's asked how are you going to do it, which deductions, which loopholes are you going to close? He can't tell you."