I put Middle Earth Journal in hiatus in May of 2008 and moved to Newshoggers.
I temporarily reopened Middle Earth Journal when Newshoggers shut it's doors but I was invited to Participate at The Moderate Voice so Middle Earth Journal is once again in hiatus.

Tuesday, October 02, 2012

Romney Gets Progressive?

The Ryan/Romney campaign has noticed that their tax plan defies basic arithmetic.  Today Romney came up with an idea that on the surface is progressive and might work.  
Mitt Romney Floats $17,000 Limit On Tax Deductions
Under pressure to provide more details about his tax reform proposal, Mitt Romney floated an idea Tuesday to help fill a revenue hole in his plan.
“As an option you could say everybody’s going to get up to a $17,000 deduction; and you could use your charitable deduction, your home mortgage deduction, or others — your healthcare deduction. And you can fill that bucket, if you will, that $17,000 bucket that way,” Romney told a Fox affiliate in Denver. “And higher income people might have a lower number.”
In other words, cap the total amount individuals can benefit from tax loopholes.
But while some tax policy experts like the idea in principle it suffers from at least one big political problem: though it would hit high net-worth people hardest, it would still require raising taxes on some middle class Americans to cover the cost of his proposal to cut everyone’s tax rates by 20 percent.
My guess is it would only impact the very top of the middle class.  As an engineer I was upper middle class and I don't remember having anything close  to $17,000 deductions.  As with all plans from Romney/Ryan with have to check the arithmetic but it's something that should be looked at.
Matt Yeglesias points out another advantage:
That has most of the virtues of normal proposals to raise revenue by eliminating deductions, but ducks some of the political problems. The big advantage is that since no particular deduction is eliminated, you don't reap the fury of the impacted interest groups in the same way.

1 comment:

  1. This is an insight into the mind of someone who has so many deductions they can be split up to carry forward for next year lest they lower his current liability from thirteen to nine percent. After a certain point wealthy people are awash with deductions. (And he still fails to address credits, carve-outs, shell companies and subsidies.)


Be Nice