Erskine Bowles is no hero of mine, but he does say something interesting today:
Republican presidential candidate Mitt Romney’s plan to reduce tax rates would need to be financed by ending widely used benefits such as the mortgage interest deduction, said Erskine Bowles, who was co-chairman of President Barack Obama’s deficit-reduction commission.
snip
Romney wants to cut all individual income tax rates by 20 percent, reducing the top rate to 28 percent from 35 percent. He would lower the corporate tax rate to 25 percent from 35 percent, eliminate the estate tax and end taxation of investment income for people making less than $200,000 a year.
snip
Romney’s plan would cost the government about $5 trillion in forgone revenue over the next decade on top of the cost of extending the income tax cuts now scheduled to expire Dec. 31. Romney hasn’t specified which tax breaks he would limit.
Bloomberg
Lots of middle class people would be hit hard by that. There is a real political issue here. Give up a mortgage tax deduction (the biggest loophole for the middle class) in order to give trillions of dollars of tax cuts to the rich. It also would make the real estate market much worse because home ownership is subsidized by that deduction.
I think Romney would lose the suburbs if people understood. Of course, he'll deny. He wants big tax breaks for the wealthy and corporations and he has a "secret plan" to end the war, I mean to balance the budget.
Nixon beat George Romney in 1968 primaries, so Mitt became Dick Nixon, just as George Bush II modeled Ronnie Reagan rather than his father. I am tired of Republican "daddy" issues.
The money will come from somewhere. Looks like Romney has decided it will be from everyone but the very wealthy.
As bad as Simpson-Bowles is, Romney's plan is even worse:
Unlike Romney, Bowles and Simpson include two features that would raise taxes for high-income or wealthy taxpayers. They would treat capital gains and dividends as ordinary income. They also would assume that the estate tax continues with a top rate of 45 percent.
Deficit reduction should take place over 15 years so that it doesn’t slow down the economy, Bowles said.
“What they tried to do in the U.K. was to do it really quickly, trying to get it, you know, to a balanced budget within five years,” he said. “We have it over a much longer period of time, so we don’t disrupt this very fragile economic recovery.”
Bloomberg
The correct answer is neither.
Pass it on: Romney will end the mortgage deduction for the middle class.