Romney's tax suggestion gives more clarity, but details still sparse

Mitt Romney this week offered some more insight into his tax reform plan, but not enough to fully understand how his agenda may impact voters' payments to the IRS or the federal deficit.

In an interview with Denver TV station KDVR on Monday, Romney suggested capping federal income tax deductions at $17,000. "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," he said. "And higher income people might have a lower number."

The idea was merely a suggestion and doesn't represent a formal policy proposal from the Republican candidate. It does, however, give some insight into how Romney might pay for the revenue losses that would come from his proposed tax cuts -- which could reach as high as $456 billion in 2015 if current policies are kept in place.

"It is at least a down payment on the revenue lost to the rate cuts," Robertson Williams, an analyst at the nonpartisan Tax Policy Center, told CBSNews.com.

• Issue brief: Taxes


• Issues 2012: In Depth

Still, there are some major unknowns: For instance, to determine how large that down payment would be, Romney would have to give some more specifics, such as whether that $17,000 cap applies to individuals or couples.

In tonight's debate, President Obama is sure to drive home the fact that Romney's tax reform plan has so far been short on details. Romney has promised to cut income tax rates by 20 percent across the board, repeal the estate tax, and get rid of taxes in investment income for those making up to $200,000. While he has said the tax cuts would be offset in part by eliminating deductions and loopholes, he has not clarified what deductions and loopholes he would eliminate.

In email to supporters Wednesday, Obama deputy campaign manager Stephanie Cutter wrote, "We'll see if Mitt Romney finds some time in tonight's 90-minute debate to tell us specifically how he can avoid raising taxes on middle-class families and still pay for another $250,000 tax cut for multimillionaires."

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[Lucky12345678]

President Obama could not look Romney in the eye, so he's done just like Jimmy Carter..

[levelheadedtoo]

If Corporations are people too, then give them a $17,000 bucket for their deductions. The Romney plan should spell an end to the Real Estate business, eliminate charity incentives and kill college for most Americans. Romney said the rich would have something like that too, but he didn't elaborate.

[marychgo]

Roughly 160 million households get their health insurance through one of the parent's employer; under most of those plans, the employer pays 60 to 80 percent of the annual cost. What that means for most families is that the employer is paying $8,000 to $12,000 a year toward your health insurance costs. Romney's "$17,000" INCLUDES that employer contribution: your W-2 would show total compensation equal to your salary PLUS the employer contribution, and then you'd put that contribution into your $17,000 "pot." But many of those 160 million households -- those who don't currently itemize deductions as well as those who do -- would end up with a lot MORE than $17,000 in itemizable deductions if employer health care contributions were included. So changing the tax treatment of these contributions is a BIG DEAL for millions of middle class taxpayers!

[levelheadedtoo]

You are correct. However, you left off how most key executives have their benefits buried into their total compensation package. They don't actually pay for health insurance or the tax on income because the company grosses up the salary to compensate for policy payments. The average line worker does not have this option.

In addition, dividend income is taxed at a lower rate than a paycheck. Executives are asking for lower salary and higher dividend payments. They use the lower salary to fool the workers into thinking they are taking a pay cut for the good of the company. They are actually making a killing on a 14% tax rate while workers are at 25 - 35%. Recently a big bank CEO said he would take just one dollar in pay until the company got out of trouble. He forgot to mention he was accepting several million shares in company stock in leu of salary. Bank shares were $2.20 at the time now they are $9.50. That exec. made a cool $19 million and the gains tax will be half of what he would have paid if it were income.

The little guy gets screwed again under the Romney plan.

[johnlockesghost]

Restore the tax code to what it was before we made the mistake of putting bush in office. If you would remember, we had a surplus then.

[ghiral]

I am really not happy with the analysis. Obama came up as a real person who defended his records and wanted to have a real conversation. Romney says he is going to give us taxcuts, deficit reduction and more defense spending. If it is too good to be true, it is. He says he is worried about people not having jobs, in reality, he enjoys firing people. He took credit for healthcare in Mass which is exactly what socalled Obamacare is. He was anti-immigration before the primaries, now he is pro. He is worried about 47% not paying taxes but he escapes his taxes by keeping money offshore. Honesty is base of any debate. Its meaningless if you debate with wrong information. You cannot never win an argument if the opponent is allowed to lie and you are honest

[Remy_V]

Someone in Florida did the math. This is posted from their post.

I opened up our 2011 tax return and calculated it based on 17k in deductions. I left in the deduction per person, as I sure hope Romney is not talking about taking that also.

Our initial federal tax goes up by 2,950.00, and you can bet that reduction in Social security tax is toast, so add on another 2% of your GROSS income for that tax.

I must tell you we ARE taxpayers, not wealthy, and have a fairly large mortgage, but that is not all that is at stake with the 17k limit.

The 17K proposed is the TOTAL of all mortgage interest, points, property tax, sales tax deduction, other taxes, Charity deductions (tithes, etc.), Medical and Dental expenses (that include insurance) over 7.5%, job expenses, etc.

The child tax credit will most certainly disappear. That is subtracted off the tax you owe, bottom line, so each child credit you get now, is 1000.00 less in your pocket.

This is not political, this IS reality.

Do the math and see what your vote MAY cost you personally.

[Remy_V]

The home mortgage interest tax deduction, among others may be on the chopping block.

Or

They may cap deductions at 17K for our returns.

What is your home mortgage interest deduction worth to you?

Not to mention many people buy a home BECAUSE of that deduction. This will effect home sales, construction, and numerous areas.

If you file long form, check your itemized deductions and see what you could lose.

How many children do you get 1000.00 child tax credit for? Lose that, and it is 1000.00 per child, out of your pocket.

I will leave it at that.

[Remy_V]

Yes, Romney said all deductions, even family member deductions.

Here's the 60 minutes link


http://www.cbsnews.com/video/watch/?id=7422772n

[Remy_V]

DO THE MATH

The President was frustrated at the inability to get real answers from Mr. Romney.

I thought he remained cool while Romney was bordering on losing it.

[eroteme2]

Stephanie is said to be a CBS political reporter. She might also be described as a Democrat serving CBS news reporter.

[clm1111]

So true !!!!

[venusvegasvada]

How can you say it gives more clarity?

It was just an idea. One of many his campaign floats out there then strike down later, off camera, by someone else in the campaign.

He throws vague ideas out there to see if it sticks or not because he doesn't have a plan.

The only thing it shows clearly is that Mitt is a BS artist that only knows how to say "it's all Obama's fault". That's it. That's what he does. I can't believe he's even running for President.

[esq777]

This guy is out of his mind. In many places deductions of state and local taxes far exceed his proposed $17,000 cap. This plan would be an utter disaster and would result in a huge tax increase for a lot of people.