Wednesday, October 10, 2012

Deductive Reasoning

Said a tax analytical gent:
"One should always make clear one's intent
On cutting deductions
To pay for reductions
In tax rates by 20%."

"Many have tried to appraise
The most likely of Mitt Romney's ways
Of sparing the loss
Of defraying the cost
Of the mortgage the middle class pays."

"Though the Gov'nor himself may not say
With what tax breaks he's doing away,
It's safe to foresee
Under Romney there'd be
Less incentive to do Schedule A."

'Twas not a gent, but a lady - Texas tax journalist Kay Bell - who analyzed Governor Mitt Romney's recent statements about his tax plan and concluded that "Romney left himself some wiggle room" in the degree to which his plan would keep the mortgage interest deduction. Says Ms. Bell:
He didn't say the mortgage interest and charitable gift deductions would remain just as they are. He said there would still be 'preferences' for them. Just spit-balling here, but since Romney again reiterated in that same Situation Room interview that he would limit deductions "particularly for people at the high end" of the income scale, it looks like some of Mitt's personal wealth peers might not get as much Schedule A bang for the tax buck as they currently do.

But would limiting some mortgage interest and charitable deductions be enough to make his tax plan revenue neutral as he insists it will be? Not many people outside the Romney campaign think so.
Though the Republican Presidential nominee hotly denies it, the non-partisan Tax Policy Center has concluded that his plan amounts to a $5 trillion tax cut over a decade, heavily tilted toward the rich, which could not be made revenue neutral without raising taxes on households with income below $200,000.

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