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October 6, 2012 / needhamgrassroots

Closing Loopholes (Romney’s Tax Plan)

from Forbes – Previously, Governor Romney has said that his tax plan would cut all individual income tax rates by 20%, eliminate the AMT, eliminate the estate tax, and eliminate taxes on investment income for low- and middle-income taxpayers.  He would also extend all of the Bush-era tax cuts that are scheduled to expire at the end of 2012.

Those tax cuts would reduce federal revenues by $480 billion in 2015 over and above the cost of extending the Bush tax cuts.  Allow for some growth in income, and the total comes to over $5 trillion over ten years.

Gov. Romney also has a super-secret plan to close loopholes and deductions on high-income taxpayers to make up the lost revenue without raising taxes on low- and middle-income households.  Efforts by the Tax Policy Center to test whether such a plan might exist have been met with furious criticism from the Romney campaign and its allies,  Through several iterations, the critique has been:

  1. that’s not our plan, and
  2. we won’t tell you what the plan actually is.

On Tuesday, there was a hint of specificity.  Governor Romney floated a trial balloon:  he’d pay for his tax cuts by capping deductions at $17,000.  As I pointed out yesterday, that plan probably doesn’t work either in the sense that it will either

  • add to the deficit, or
  • raise taxes on middle-income households, both of which the Romney camp has strenuously disavowed.

Of course, it’s hard to tell what that plan would or would not do because again there are no details.  I assume that if the TPC tried to analyze it, Romney would reply that

  1. that’s not our plan, and
  2. we won’t tell you what the plan actually is.

In fact, it’s pretty clear that even Gov. Romney doesn’t know what this incarnation of his secret plan is.  Last night, he said:

And I’m going to work together with Congress to say, OK, what — what are the various ways we could bring down deductions, for instance? One way, for instance, would be to have a single number. Make up a number, $25,000, $50,000. Anybody can have deductions up to that amount. And then that number disappears for high-income people. That’s one way one could do it.

So the deduction threshold is not necessarily $17,000.  It is “make up a number.”  That’s helpful.

The bottom line is that we have no idea how Gov. Romney will make up the revenue lost due to the tax cuts he has specified in some detail.  Obviously, Gov. Romney doesn’t either.  The odd thing is that he seems to think that this is irrelevant.

From: About Mitt Romney’s $5 Trillion Tax Cut – Forbes – http://onforb.es/SDcGLX

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