Former MA Governor Mitt Romney campaigns through swing states, seen here in June with Senator Pat Toomey (R-PA)
In a Monday night interview with a Fox affiliate in Denver, Republican presidential nominee Mitt Romney announced he would limit tax deductions up to $17,000. That's all well and good, but did he pick that number out of thin air? The former Massachusetts governor didn't specify in his quoted comments:
“As an option you could say everybody’s going to get up to a $17,000 deduction; and you could use your charitable deduction, your home mortgage deduction, or others — your healthcare deduction, and you can fill that bucket, if you will, that $17,000 bucket that way. And higher income people might have a lower number.
“Or you could do it by the same method that Bowles-Simpson did it where you could limit certain deductions, but that’s the sort of thing you do with Congress.”
While we wait to find out why Romney chose that $17,000 number or if he will adjust it, the proposal appears as close to a politically neutral one as possible in the world of taxes. It increases federal revenue while avoiding targeting any one particular exemption, deduction, or group of people that might lead to an outcry. Senator Pat Toomey (R-PA) proposed limiting the value of deductions in July, but he offered no specific number in his plan to reduce the deficit.
Hopefully, in the 45 minutes allotted to discussing the economy in tonight's debate, moderator Jim Lehrer can offer some pointed questions to elicit more specifics about Romney's vague tax plan.
Video of Romney's interview with the Fox affiliate is embedded below.
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That deduction cap is not a bad idea. The problems? There is no way his larger donors are on board with this unless he has made it clear to them how they will be able to by-pass this limitation. If you've got several hundred-thousand to millions in regular deductions, you're not giving them up without incentive. Sure, some people would be willing to, but that's not the game the Adelson's of our country play. Further, it's easy to suggest such a cap in absence of details about the deductions that would be cut. If you cut all the deductions that affect middle-income households and you don't have to worry that they'll be hitting that cap. What is the average deduction taken by middle-class filers, anyway.