This should be hammered by Obama tonight. Romney now wants to limit deductions to 17,000...
While Bloomberg thinks this is good...its not...
I don't know how many of you have homes under water. Mine is drowning.
But for those who played by the rules and continued in their homes when the crisis hit, the sole benefit one got was the tax deduction.
If you limit that deduction now, you are going to cause a new round of home foreclosures. The middle class will again take another hit, just for a rich tax cut.
The Tax Policy Center' s analysis already showed you needed to remove all deductions for Romney's plan to be revenue-neutral. So this new item not only hurts middle-class home owners but still increases the deficit.
Not to mention the charitable deduction....charities also take a hit.
If this idea does not get blown to bits tonight I will be disappointed....
1:07 PM PT: Update: Obama for America Responds...
After months of failing to explain how he could make his $5 trillion tax plan add up, Governor Romney has finally admitted that middle-class tax breaks are on the table. He said that he might cap deductions at $17,000—meaning he would limit the charitable, home mortgage, health care and other deductions to that amount. It’s a new idea—but, just like the many other ways Romney has described his tax plan, it would raise taxes for millions of middle-class families.
Here’s the problem: Many families deduct much more than $17,000 now. In fact, health premiums alone cost $15,745 this year, according to the Kaiser Family Foundation. So if a family started there, Romney’s plan would instantly wipe out nearly all other deductions—including mortgages, charitable contributions, and state and local taxes.
The result would be higher taxes for many families. Consider these two examples:
•$3,000 tax increase on a family of four making $125,000: This family has an employer health plan worth $16,000, pays $2,333 a month in mortgage interest, and contributes $3,000 a year to charity and pay $6,000 a year in state and local taxes. Despite benefiting from lower tax rates under the Romney plan, nearly all of their deductions outside health insurance would be wiped out—leaving the family with a $3,000 tax increase.
•$400 tax increase for a family of three with an income of $85,000: The family has an employer health plan worth $16,000, makes monthly mortgage interest payments of $1,250, contributes $5,000 to charity, and pays $6,000 in state and local taxes. They lose all but $1,000 of their deductions, resulting in a $400 tax increase even after Romney’s lower tax rates are included.
These examples are hypothetical, but hardly uncommon. Millions of middle-class families claim tens of thousands of dollars in tax deductions and would face higher taxes under Romney’s plan. And of course, any attempt to limit that impact would simply mean that Romney would be farther away from paying for his tax cuts.