Romney's tax plan

Romney's tax plan has never been spelled out completely. It starts with a 20% across the board cut for everyone. That is where Obama gets the $5 trillion revenue loss figure, but Romney says he will make the cuts revenue neutral by eliminating deductions, refusing to specify which.

That's where the problem lies. Some taxpayers have a lot of deductions and might see an increase in their taxes, while others with few deductions would get a large tax cut. It might average out, but you don't want to be on the wrong side of that averaging.

What's missing from the discussion is that any tax plan will have to be passed by Congress. Many deductions are aimed at certain businesses. The housing and real estate lobbies will argue fiercely against eliminating the deduction for home mortgage interest and that is a big one—for many taxpayers, their largest deduction. State and local income taxes are a big deduction in some states, but not in others. Where income tax is high the Congressional delegations from those states will vote against eliminating the deduction and Romney may not get the support of his party on that one.

Voters may well go for the 20% income tax cut, not realizing what they could lose in deductions. As long as Romney refuses to tell, he may win votes. The clincher is that the Tax Policy Center claims that no combination of eliminated deductions adds up to enough to allow a 20% tax cut. Analysts who disagree rely on a large increase in economic growth to offset the shortfall.

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Replies to This Discussion

Permalink Reply by booklover on October 18, 2012 at 8:18am

I swear too much Steph. lol.

Permalink Reply by Steph S. on October 18, 2012 at 11:56am

You are just great booklover! : )

Permalink Reply by booklover on October 18, 2012 at 2:07pm

 

So are you Steph! :)

Permalink Reply by Sentient Biped on October 18, 2012 at 2:32pm

Swear more.  Please.

Permalink Reply by booklover on October 18, 2012 at 2:39pm

I will if that fucker Romney wins! ;)

Permalink Reply by Steph S. on October 17, 2012 at 10:50pm

Yeah it's fantasy Jonathan

Permalink Reply by Dr. Allan H. Clark on October 18, 2012 at 10:39am

The Tax Policy Center has published a new table showing the effects of capping deductions at either $17,000, $25,000, or $50,000 or eliminating them completely. None of these options provide enough revenue to make up for a 20% cut in rates. It's not even close.

http://www.taxpolicycenter.org/numbers/displayatab.cfm?DocID=3590

Permalink Reply by Jonathan Simeone on October 18, 2012 at 11:14am

There really is no way a reasonable person could accept Romney's proposals as anything but ilogical. I actually believe that Romney knows his "tax plan" is a joke. He can't be that stupid. He's just counting on lots of people being stupid enough to fall for his trick.

Permalink Reply by Dr. Allan H. Clark on October 18, 2012 at 11:31am

Any detailed discussion of taxes soon surpasses the capacity of most. Our mind-boggling tax code is extraordinarily complex and full of favors to various segments. Here is a discussion of what the numbers mean, but it is still not made entirely clear because it does not discuss cuts to other taxes that Romney proposes.

http://taxvox.taxpolicycenter.org/2012/10/17/how-much-revenue-would...

Permalink Reply by Steph S. on October 18, 2012 at 11:57am

And unfortunately many people are stupid Jonathan.

Permalink Reply by Jim DePaulo on October 18, 2012 at 12:26pm

That's true, there are legions of morons in the country who vote; however, when the nitty gritty of tax policy gets into the discussion even the intelligent citizen's eyes glaze over.  Mitten's economic plan is bullshit and he knows it - if he doesn't then his "business cred" is a joke.  But then, Mittens has switched hats so many times who knows what he actually means or thinks?

Permalink Reply by booklover on October 18, 2012 at 2:09pm

Mittens also claims to believe that Joseph Smith shit, so maybe he IS that stupid.  Or maybe really devious.  Either way I can't stand the thought of him being our president.  We will be a laughing-stock.

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