Romney: $17K tax deduction lid a possible route
JEWEL SAMAD/AFP/Getty
DENVER Offering tax reform ideas before his first debate with President Obama, Mitt Romney says he might be willing to reduce income tax deductions used by millions of families for home mortgage interest and health care costs.
Romney suggested the changes could be part of a plan that includes a 20 percent cut in tax rates across the board, continuation of upper income tax cuts that Mr. Obama wants to end, and a comprehensive tax overhaul plan that the Republican presidential contender has so far declined to flesh out in detail. Romney says his overall plans would invigorate the slowly recovering U.S. economy.
Both Romney and Mr. Obama spent Tuesday mostly in private, preparing for the debate, the president in Henderson, Nev., near Las Vegas, Romney was already in Denver, where the faceoff will take place Wednesday at 9 p.m. EDT. Neither held public campaign events, but Mr. Obama took a break from preparation to visit nearby Hoover Dam, and Romney picked up lunch at a Chipotle Mexican Grill near his hotel.
In an interview Monday night with Denver TV station KDVR, Romney said, "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 health care deduction, and you can fill that bucket, if you will, that $17,000 bucket that way. And higher income people might have a lower number."
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A Romney adviser said changes in other areas — a taxpayer's personal exemption and the deduction or credit for health care — would also be taken into account if deductions were limited as Romney suggested. Combining changes to those two areas with the limit on deductions would maintain Romney's goal of keeping tax burdens the same for wealthy and middle income taxpayers, the adviser said. Under such a proposal, some taxpayers' deductions could remain unchanged.
On another controversial subject, in a separate local interview ahead of the debate, Romney told The Denver Post he would honor the temporary permission the Obama administration has granted to many young illegal immigrants to allow them to stay in the country.
Mr. Obama announced in June that he would prevent deportation for some children brought to the United States by illegal immigrant parents. Applicants must not have a serious criminal record and must meet other requirements, such as graduating from high school or serving in the U.S. military.
Romney had previously refused to say if he would retain the policy if he won the election.
He granted the interviews as he and Mr. Obama looked ahead to the debate, the first of three they will hold before Election Day, Nov. 6.
The debates, expected to draw a huge nationwide audience, take place with most polls showing Obama slightly ahead both nationally and in the battleground states expected to settle the election.
In Denver, in his comments on taxes, Romney also cited the tax plan included in the Simpson-Bowles deficit commission recommendations as a possible course. That plan calls for reducing the top income tax rates. To pay for that, the plan would eliminate or reduce many popular tax breaks, including deductions for charitable donations and mortgage interest.
While Romney did not commit to making any specific changes, saying he would work with Congress, his suggestions were more specific than those he had offered in the past and provided a new window into his thinking on the subject.
In the spring, Romney told donors that he would consider eliminating home mortgage deductions for second homes. That conversation, behind closed doors, was overheard by reporters standing on a private sidewalk.
The numbers are important because Romney has said that he will lower tax rates across the board without reducing government revenue. He also says he wants wealthy Americans to continue to shoulder the same share of the tax burden as they do today. One way to make the numbers add up would be to adjust tax deductions and exemptions.
Romney campaign spokeswoman Andrea Saul insisted his plan still would cut taxes for middle income earners. "There are a range of policy options, Gov. Romney referenced one illustrative example, to achieve these goals," Saul said in an emailed statement. She did not mention any other options.
Romney's interviews with Denver outlets were the last ones planned before he takes the stage Wednesday night. Moderator Jim Lehrer plans to focus on the economy, health care and the role of government.
Romney's tax plans are likely to be one focus. U.S. tax law at one time limited tax deductions and personal exemptions for high income people, but those limits were removed as part of the massive package of tax cuts passed under President George W. Bush.
The limits are scheduled to return next year, when the Bush-era tax cuts are scheduled to expire unless Congress acts in the meantime. Romney and other Republicans want to extend all the tax cuts while Congress works to overhaul the federal tax code. Mr. Obama wants to extend them for individuals making less than $200,000 and married couples making less than $250,000.
Romney says his plan would generate the same amount of tax revenue as the current system but do it more efficiently, without raising taxes on any group of people. Romney also says he would not raise taxes on investment income.
The Tax Policy Center, a nonpartisan research group, says it is impossible to reduce tax rates by 20 percent for the wealthy without shifting some of the tax burden to middle class families. The Romney campaign disputes the study, which has also been challenged by several conservative think tanks.
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If you reduced the tax rate by 20% the numbers could look like this:
Rate - Income Tax Bracket. - CAP - ETR
-------------------------------------------
• 8% - $1,000. to $12,400.. - 7% - 1%
•12% - $12,400 to $47,350.. - 7% - 5%
•20% - $47,350 to $122,300. - 7% - 13%
•23% - $122,300 to $198,050 - 7% - 16%
•26% - $198,050 to $388,350 - 7% - 19%
•28% - $388,350 and over... - 7% - 21%
In the end, the rich who don't really need entitlements will be the winners and the middleclass who do will lose...
Europe though felt it necessary to also drop its top income tax rates, but by not starting at the same point of established wealth and global market share if made it first to the unsustainable debt level the USA is heading to.
Reagan also started the Republican practice of substantial increases in the National Debt during time when Republicans are in control. Reagan himself tripled the then small National Debt. His supply side economics was also proven false and the unneeded manufacturing capacity that resulted made it harder for companies to manufacture in the USA and stay competitive globally.
Every Republican President after Richard Nixon substantially raised the National Debt, both in absolute terms and as a percentage of the Gross Domestic Product (GDP), while every Democratic President since 1945 up to Obama (who started with G. W. Bush's $1.8 trillion annual deficit spending) has lowered the National Debt as a percentage of the GDP. This is basic arithmetic that is easily verified by anyone with 6th grade math skills and a reference librarian available to find the published data, which I have personally verified. Reagans time in office also matches when wages in the USA started the long term decline in realy purchasing power that requires both parents to work to maintain a good middle class life style.
Go to the IRS website.
Well first of the LOWEST annual taxable income that would get someone in the 35% bracket Married filing separately and making $189,575.00 and that's just for the income above $51,287.00.
So let's do the math (worse case mind you) for someone whose taxable income is $50,000 OK?
For the first $8,500 they would pay 10% or $850.
For the income above $8,500 up to $34,500 they would pay 15% or $ 3,900
For the income above $34,500 up to $39,675, whoops we said $50K didn't we, so up to $50,000 they would pay 25% or $3,875.
Now we add all that up and it comes to $8625 or 17.25% effective tax rate and that's absolute worse case scenario, and yes this is straight out of the 2011 IRS tax tables and doesn't even take into account standard deductions or exemptions.
I will accept your apology now.
Are you on drugs. Pay attention moron!
Are you on drugs. Pay attention moron!
It would be fairer to renters to eliminate the mortgage deduction, but it would also eliminate much of the reason for buying a home in the first place, and it might even eliminate most real estate agent jobs as well as those involved with mortgage lending, since many fewer people would find it made economic sense to buy a home rather than rent it, while businesses would use their own staff for real estate. After all owning a home reduces your job mobility and makes it harder to accept promotions that require relocation or to relocate to places with better job prospects in recessions.
Every tax deduction hurts some while helping others.
Perhaps the best idea is to replace capital gains low tax rates entirely with asset class inflation being allowed to reduce the tax reportable profit, but no special tax rate.
Right now if I sell an investment I have held for a year I get the very same very low capital gains tax rate as the investor who sells an asset they have owned for 30 years, a true long term investment. Yet in the 30 year case it is likely all of the gain is simply inflation in that type of investment and no real profit. In fact if the 30 year investor had to take depreciation on their investment they could pay as much as 300% more in taxes because of IRS depreciation recovery even if the gain is all inflation only.
posted 1300 CST, 3 Oct (God CBS could you at least bring back the time stamps?)
LMAO!......only an "infantryman" who didn't have a high enough GT score on the ASVAB to qualify for anything else in the military, would be the ONE to not be able to figure out that it's the "tax cuts" (combined with ZERO spending cuts from Reagan and Bush) that have put the nation in this mess.
LOL!
You and Obama extended the Bush Tax Cuts twice in 3 years!
Stop "riden dirty" on your facts.
You can bet your sweet arse that all of the loopholes Mitt would close would be on the middle class.He has spent his entire adult life trying to avoid paying taxes on his vast wealth. Why would that change now for Mitt and his rich buddies?
LOL!
So you are jealous. Very very obvious.