“Well, I’m not going to lay out a piece of legislation here,” he said, “because I intend to work together with Republicans and Democrats in Congress, but there are a number of ways one could approach this. One would be to have a total cap number. It could be $25,000, $50,000. And people could put whatever deduction in that total cap they’d like.” Mitt on CNN with Wolf Blitzer
Did Romney mean what this seems to say? If so, I think he has a good idea. Inc. deductions like this would in effect be another way of having a progressive income tax since it is the rich that benefit most from their ability to use almost any deduction.
I see two problems with the idea.
The first, of course, is is Romney’scommittment ot the wealthy. Since the wealthy are much more highly affected by deductions then other folks, Romney’s plan would have to have a greater decrease in rates for the rich than for all classes people. IDoes he want to selectively reduce taxes on the rich?
The second is a lack of clarity in what Romney is describing as a deduction. The mortgage deduction or the charitable deduction is very easy to understand. Presumably this is the sort of deduction Mr. Romney might cap at “$25,000-$50,000.” The other form of deduction, the ability to offshore money or do duct your horse as a business expense, is only available to the rich.
Presumably Mr. Romney does not intend eliminating that kind deduction!
To be honest, I have no real idea what Mitt intended to say.