His plan targets everyone, all taxable Americans, Rich and Poor, and all those in between. According to the Romney camp there is potentially 1.1 Trillion at stake and this would most certainly put a dent into the deficit, however again Romney has given up math for talking points.
IIRC, he was talking about capping it at either $17k or $25k (or something in that range). That's not going to affect most Americans at all, and certainly not the "Poor".
There are approximately 230 Million people in the US who are taxable, this equates to about 4700 dollars of increased taxation per taxable citizen. Granted some will be exempt (in the sense they don't have deductions to claim) and others hit harder depending on their sources of equity. (ie. those who own multiple properties will be hit the deduction cap faster and thus pay more taxes in the end than say the guy who is renting, or own just one home.)
Yeah. Which might be a reasonable (but still flawed) assessment of the tax component of Obamacare, which is essentially a flat tax that directly affects just those above the poverty line, but who don't have jobs that provide health care as a benefit. So it hits the working class and lower middle class folks and if you think it'll actually just be $2500/person/year, I've got a bridge to sell you. You can't just calculate the total amount "saved" and divide by the entire tax base.
A deduction cap is essentially the same as increasing the taxation of the people.
Only if we're using a very broad definition of "taxation" (which isn't the word Romney uses). Romney makes a specific distinction between "raising taxes" and "lowering deductions". And while you can argue that both result in people paying more total taxes, he's not being misleading when he uses the terms he's using. Unlike say calling a tax credit a tax cut, for example.
Something that Romney adamantly said he would not do several times over the course of the campaign and debates (including the GOP debates).
Again, I'm certain he did not use such a vague word as "taxation" in this context. It's meaningless and interesting that you chose it.
Yet his plan directly increases the taxation of Americans by limiting their deduction those being hardest hit...the middle class, and the wealthiest of Americans. The two categories of people he explicitly said would see no increase to their personal taxes.
It puts a cap on deductions. It's a tax idea. And one which resonates with many people. You're getting caught up in details though. Remember that no "plans" talked about during a presidential campaign end out being exactly implemented as stated during the campaign itself. There is this whole congress thing that kinda gets in the way. It's about the concept and approach, not the details. And the idea of putting some kind of cap on deductions is one which people tend to like more than just having tax rates increased. Because when you increase the tax rates, that affects everyone in a given bracket. When you cap deductions it *only* affects those taking large amounts of deductions. If the cap is a hard number, then only people who earn enough money and had enough money to use in various ways (to earn the deductions in the first place) are affected.
That has issues all by itself, and could be (would be) a mess to implement since you'd somewhat have to have exceptions, but as a concept it's a valid one and we're to judge such things by the same measuring stick, his math works just as well (better really) than Obama's. And in a contest between two candidates, that's all that really matters.
Now Obama has a similar plan, he would like to cap deductions at 28% of equity. However the key difference he only plans to impose these caps on the folks earning over 250K/yr. Leaving the vast majority of Americans without this phantom tax increase., particularly middle class Americans.
I'm assuming you meant "earnings" and not "equity"? Yeah. Yet another Obama "I'm just taxing people who make over $250k/year" bit. This has all the same problems that Romney's plan does, but doesn't generate any real significant revenue increase because it does avoid taxing the meatiest part of the tax base. I mean, I know that the whole "middle class versus rich" is a new theme that Obama is trying out, but the reality is that there's an absolutely massive difference between someone making say $60k/year and someone making $249k/year, but both are considered "middle class". To pretend that somehow someone's fortunes stay the same until they magically cross the $250k/year income barrier is absolutely absurd.
Don't get me wrong, I'm one of those in that range who would most benefit from Obama's plan. I earn enough money to be very comfortable but am still well below where he's decided to set his magical cutoff for his tax plan. But I also understand that I earn that nice comfortable income *because* there are rich people and big businesses who are able to retain sufficient money after tax to employ me (small businesses don't tend to pay their employees 6 figure salaries, do they?). It is vastly more in my long term interest for folks in that range to take a minor hit spread across a large number of people, than to focus it all on the relatively small tax base that Obama is going after. Because those brackets (and businesses) will be hit *hard*. And it'll directly affect how many people they employ and how much they can pay those people.
You don't affect the size of the middle class if you cap their deductions (or even raise their taxes). You do shrink the middle class if you lump the same total dollar of revenue increase in the form of higher taxes (or lower deductions) targeted entirely on "the rich". And the kind of deduction cap that Romney is talking about would not hurt those most in need of deductions, while preventing those who don't really need them from taking advantage of the tax system.
Now, ideally, we go in and completely re-do the tax code, but that's an even harder thing to accomplish. I suspect this deduction cap idea is just an alternative easier step.
What is it with this guy and basic math, and glossing over details?
He didn't gloss over details. You've invented details. I also find it interesting that you ignore the same flaws in Obama's plan, while highlighting them in Romney's. Both have the same problems. Romney at least has the benefit of spreading the impact more and actually reducing the deficit more. So if we're going to compare two early stage plans, his is absolutely better.
Edited, Oct 9th 2012 6:22pm by gbaji