Somehow I don't believe Mitt Romney really thought his $17,000 cap on itemized deductions through. And I doubt it came from whoever gives him tax/economic advice, either.
I suspect he read it somewhere and decided to trot it out as (as someone else called it) a bright shiny object to deflect from his mounting woes.
So how would Mitt's new idea affedt MITT'S taxes?
Hold your nose and jump over the thingie.....
I'm looking at Mitt's 2010 return and here are the important (for our purposes) numbers:
Itemized Deductions 4,519,140
Net Income 17,127,367
So, if Mitt's idea is implented, what affect does it have? Not as much as it might, because almost all of his income is taxed at the capital gains rate of 15%, but here's what his numbers might look like:
Itemized Deductions 17,000
Net Income 21,629,507
That's an additional $677,871 that Mitt will have to pay.
And for Mitt, the worst part is that because almost all of his income is taxed at 15% - which his own tax plan won't change - he gets almost NO benefit out of the 20% tax rate cut in his plan. So Mitt's taxes will go up almost $700,000.
Seriously? The guy who, for his entire adult life, has pursued tax dodges, deductions, exemptions, avoidance, foreign investments and every other possible way to minimize his taxes with religious fervor..... is going to ruin all that all by himself?
If you believe that, you should call Reverand Al Sharpton about that bridge he's got for sale.
Another reason this won't fly with conservatives, in my opinion, is that - at least at this level of income and deductions - it appears to be very progressive.
At middle-class income and deduction amounts, it still looks somewhat progressive, although what really stands out for me is that it will drastically change many familys' taxes, some for better and some for worse.
Consider a family with income of $80,000 and deductions of $40,000.... they're screwed by having to pay taxes on an additional $23,000 of income, which is more than they'll ever save with the 20% rate cut.
Other examples will show taxes going up and down, sometimes by a lot, even if the bottom line somehow shows that this is 'revenue neutral'.
But, finally, since Republicans are all about 'freeing up the job creators'.........
How is taking an extra $700,000 from a prime-grade 'job creator' like Mitt Romney going to stimulate the economy, at least from the Republican viewpoint?