Wed Oct 3, 2012, 12:19 PM
Texas Lawyer (350 posts)
Voodoo Economics: growth by lowering tax rates while also raising revenue by limiting deductions
Willard promises "I am not reducing taxes on high-income taxpayers," but then he says he would "bring our rates down to encourage growth, keep revenue up by limiting deductions and exemptions." Willard also promises that his undisclosed change in tax policy would "remain revenue neutral" and yet somehow also "create an enormous incentive for growth in the economy." link: http://www.msnbc.msn.com/id/48959273/ns/meet_the_press-transcripts/#.UGxYpVHMPh8
The only detail we have is Willard's vague proposal to impose a $17,000 limit on deductions that "you could use your charitable deduction, your home mortgage deduction, or others your health care deduction." link: http://www.newsday.com/news/nation/mitt-romney-suggests-cutting-mortgage-interest-deduction-on-eve-of-presidential-debate-1.4066809
This is nonsense. If the elimination of loopholes and deductions and exemptions exactly balances the cut in tax rates, as must be the case if this change is as "revenue neutral" as Willard promises, such a neutral change would do nothing to encourage or discourage growth because it would be a neutral change.
If this were a revenue neutral change, it would not offset any meaningful reduction in the tax rates and -- even if it did -- how would that possibly create the promised "enormous incentive for growth in the economy"? This would not encourage economic growth; it would crush the recovery of the housing market.
Don't let Willard get away with Voodoo Economics!
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Response to Skink (Reply #1)
Wed Oct 3, 2012, 12:59 PM
Texas Lawyer (350 posts)
2. Romney's Voodoo Economics disproportionately hits middle class voters in Colorado and Virginia.
We should get the word out:
Mitt Romney floated the idea of a $17,000 limit on itemized tax deductions Tuesday night and is likely to get a quick lesson in the risks of providing details about his tax plans.
The Government Accounting Office confirms the disproportionate hit on middle class voters in Colorado and Virginia. See http://gao.gov/assets/600/593752.pdf
Also, this is just a tip-of-the-iceberg elimination of tax deductions affecting the middle class. If Romney is going to fund a reduction in the tax rates for the ultra-wealthy 1%, he's going to have to eliminate many, many more middle class tax deductions that just this proposal.