Romney says wants "flatter, simpler" tax system

SHELBY TOWNSHIP, Michigan (Reuters) - Battling to come back in Michigan, Republican Mitt Romney said on Tuesday he wants a tax system that is flatter and simpler as he laid the groundwork for a major economic address coming up in days.

Romney's candidacy, once seen on a path to win the Republican nomination to challenge President Barack Obama in November, is in trouble should he fail to win the February 28 primary in Michigan, the state where he was born and where his father served as governor.

At a town hall-style event in Shelby Township, Romney was heavy on economic themes as he gave a preview of a major address he is due to deliver on Friday in Detroit.

"I want to see taxes flatter, and fairer and simpler, because I want our tax policies to encourage growth," Romney said. "I'll also be talking about the need to balance our budget. I'll be talking about more things to reduce in our spending to get our budget annually balanced."

He said he would address tax policy, federal spending and the need to get control of entitlement programs whose costs are soaring like the Medicare health insurance program for the elderly and the Social Security retirement program.

Romney plans to return to Michigan for a heavy dose of campaigning after a debate with his rivals on Wednesday in Arizona, which also holds its Republican primary on February 28.

In a reflection of opinion polls showing rival Rick Santorum ahead in Michigan, Romney was introduced by state Attorney General Bill Schuette as "the comeback kid" at a campaign event in Michigan's Macomb County.

"We've got a barn burner of a campaign right now in Michigan and Mitt Romney is fighting like an underdog," Schuette said.

Romney played up his Michigan roots, pointing out the Polish "Paczki" jelly-filled pastries handed out to the crowd. On several occasions he mentioned "my state," but was referring to Massachusetts where he was governor and now lives.

He has centered his campaign around economic issues, contrasting his experience as a business executive to Obama's struggles to stimulate growth in the U.S. economy.

Romney's challenge is to take on Obama on his handling of the U.S. economy at a time when it is improving, with the unemployment rate on a downward trend and the Dow Jones industrial average flirting with the 13,000 level.

Romney kept up a drumbeat of attacks on Santorum, a line of criticism bolstered by negative ads from Romney forces that are awash in Michigan.

Santorum, he said, has had a career in Washington, first as a lobbyist, then member of the House of Representatives and Senate and then back to being a lobbyist.

"I don't think you can change Washington if that's all you've ever known," Romney said.

(Editing by Will Dunham)