"I'm going to probably eliminate for high income people the second home mortgage deduction," Romney said, adding that he would also likely eliminate deductions for state income and property taxes as well.Keep in mind that Mitt Romney's trickle-down tax cut proposal would cost about $3.4 trillion over the next decade. Now he says his secret plan to pay for it would "probably" be to eliminate the mortgage interest deduction on second homes for high income people and also to eliminate their state and local sales tax deductions.
"By virtue of doing that, we'll get the same tax revenue, but we'll have lower rates," Romney explained. "The nice thing about lower rates is that small businesses not get to keep a larger share of what they're earning and plow it back in to hire more people and expand their business."
Given that it's a secret plan, nobody really knows what he means by "high income" but however you slice it, his plan doesn't come anywhere near paying for the tax cuts. In 2001, CBO estimated getting rid of the second home mortgage interest deduction would raise $7.8 billion over a decade—and that's if you got rid of it for everybody. Even adjusting for inflation, it wouldn't make a dent in his $3.4 trillion figure. In in 2008, CBO reported that 37 percent of the benefits from the deductibility of state and local taxes went to taxpayers earning more than $200,000 annually. Over the next decade, the deduction overall will cost about $900 billion, so even if Romney meant what he said, at most you're looking at about $300 billion to $350 billion to pay for a $3.4 trillion tax cut.
The bottom-line is that even if you take Romney at his secret word, he still leaves more than 90 percent of his trickle-down tax cut unpaid for. For a guy who says business his his strong suit and fiscal conservatism is at the core of his campaign, that should be a shocking fact.