What are your thoughts on the idea of a "blanket deduction"?

[maxiep]

The Romney/Ryan ticket has proposed reducing income tax rates 20% and eliminating the capital gains tax in exchange for closing loopholes in the federal tax code and giving a "blanket deduction" of a certain amount to be negotiated with a new Congress after he takes office. I've heard, $15K, $17K and $25K; I imagine the amount would be that which would make the lowering of other tax rates revenue neutral.

In other words, you can deduct the interest on your mortgage, the interest on your student loans, your charitable giving, energy tax credits, whatever, only to a certain amount.

Frankly, I like it. It allows you to make the choice, rather than the government telling you what deductions you may or may not take. It takes the power away from the Federal government to mess around with the deductions to benefit certain voting groups or organizations over others.

It hasn't been discussed in here, so I was wondering what everyone thought of the idea?

 

[barfo]

In other words, you can deduct the interest on your mortgage, the interest on your student loans, your charitable giving, energy tax credits, whatever, only to a certain amount.

Frankly, I like it. It allows you to make the choice, rather than the government telling you what deductions you may or may not take. It takes the power away from the Federal government to mess around with the deductions to benefit certain voting groups or organizations over others.

It hasn't been discussed in here, so I was wondering what everyone thought of the idea?

I don't understand what you mean about choice. It's not like you'll be able to deduct what you spend on porn or beer. You still only get the deductions that have been written into the tax code. If you are below the cutoff, you take all your deductions. If you are above, you don't take some of the deductions, but it makes absolutely no difference which ones you 'choose' to deduct and which ones you 'choose' to leave off.

As for the idea of a cap on deductions, it already partly exists in the form of the AMT.

As for the overall idea, it's basically a scam to allow Romney to pay zero tax.

barfo

 

[DaLincolnJones]

I like the idea of lowering the tax rate and only allowing a set amount of deductions.

how is it a scam, Barfo? I call bullshit

 

[barfo]

I like the idea of lowering the tax rate and only allowing a set amount of deductions.

how is it a scam, Barfo? I call bullshit

Romney pays 14% now. Under the Romney/Ryan proposal, he'd pay 0%, or very close to it.

Guess who is going to make up for the tax Romney won't be paying anymore?

Hint: his name rhymes with DaLincolnBones.

barfo

 

[e_blazer]

Romney pays 14% now. Under the Romney/Ryan proposal, he'd pay 0%, or very close to it.

Guess who is going to make up for the tax Romney won't be paying anymore?

Hint: his name rhymes with DaLincolnBones.

barfo

Just curious as to how you come to that conclusion. Romney pays around 14% of what he makes in taxes because most of his income comes from capital gains. I am not aware of any proposal on the table from Romney to lower the capital gains tax rate. He wants to lower the income tax rates for everybody, but that doesn't impact capital gains rates. He also wants to cap deductions at something around $25,000 (or at least that's the example number he threw out at the last debate). He's said that he will keep the amount of total taxes paid by the top 5% at around the 60% of the total taxes collected that they now pay. So how does that equate to him paying 0%? Or am I missing something?

 

[maxiep]

Just curious as to how you come to that conclusion. Romney pays around 14% of what he makes in taxes because most of his income comes from capital gains. I am not aware of any proposal on the table from Romney to lower the capital gains tax rate. He wants to lower the income tax rates for everybody, but that doesn't impact capital gains rates. He also wants to cap deductions at something around $25,000 (or at least that's the example number he threw out at the last debate). He's said that he will keep the amount of total taxes paid by the top 5% at around the 60% of the total taxes collected that they now pay. So how does that equate to him paying 0%? Or am I missing something?

Romney has also discussed lowering the capital gains rate to zero. The amount paid by the wealthy would remain static through elimination of loopholes, which are a much bigger form of tax avoidance than capitol gains. For example, getting rid of things like variable pre-paid forward contracts, which allow people to cash in on actual capitol gains while reporting a paper loss.

 

[barfo]

Just curious as to how you come to that conclusion. Romney pays around 14% of what he makes in taxes because most of his income comes from capital gains. I am not aware of any proposal on the table from Romney to lower the capital gains tax rate. He wants to lower the income tax rates for everybody, but that doesn't impact capital gains rates. He also wants to cap deductions at something around $25,000 (or at least that's the example number he threw out at the last debate). He's said that he will keep the amount of total taxes paid by the top 5% at around the 60% of the total taxes collected that they now pay. So how does that equate to him paying 0%? Or am I missing something?

I was basing that on maxiep's initial post. If the cap gains rate goes to zero, then somebody is going to pay more, because Romney is going to pay less.

barfo

 

[MickZagger]

Smells like some more neo-con bullshit

 

[e_blazer]

Romney has also discussed lowering the capital gains rate to zero. The amount paid by the wealthy would remain static through elimination of loopholes, which are a much bigger form of tax avoidance than capitol gains. For example, getting rid of things like variable pre-paid forward contracts, which allow people to cash in on actual capitol gains while reporting a paper loss.

Going by his website, that's not a part of his official tax plan:

Individual Taxes
- Make permanent, across-the-board 20 percent cut in marginal rates
- Maintain current tax rates on interest, dividends, and capital gains
- Eliminate taxes for taxpayers with AGI below $200,000 on interest, dividends, and capital gains
- Eliminate the Death Tax
- Repeal the Alternative Minimum Tax (AMT)

Corporate Taxes:
- Cut the corporate rate to 25 percent
- Strengthen and make permanent the R&D tax credit
- Switch to a territorial tax system
- Repeal the corporate Alternative Minimum Tax (AMT)

http://www.mittromney.com/issues/tax

 

[3RA1N1AC]

i wonder why he wouldnt put that on his website?

 

[Masbee]

The Romney/Ryan ticket has proposed reducing income tax rates 20% and eliminating the capital gains tax in exchange for closing loopholes in the federal tax code and giving a "blanket deduction" of a certain amount to be negotiated with a new Congress after he takes office. I've heard, $15K, $17K and $25K; I imagine the amount would be that which would make the lowering of other tax rates revenue neutral.

In other words, you can deduct the interest on your mortgage, the interest on your student loans, your charitable giving, energy tax credits, whatever, only to a certain amount.

Frankly, I like it. It allows you to make the choice, rather than the government telling you what deductions you may or may not take. It takes the power away from the Federal government to mess around with the deductions to benefit certain voting groups or organizations over others.

It hasn't been discussed in here, so I was wondering what everyone thought of the idea?

I haven't heard about reducing capital gains taxes to 0%. Where is that a serious policy proposal?

Anywho, I am strongly opposed to the idea.

It would be the Republicans ObamaCare. Something that if they did, they would cram through Congress over the very strong opposition of all (or nearly all Dems) that would be bitterly opposed and hated by a significant portion of the Dem base (and some Republican voters too) that would cost the Republicans dearly in the polls.

At a time of such high income and wealth disparity it is a bad idea that would stoke the flames of class warfare in our political environment. The blowback could be small - Dems retake Congress and reinstitute current rates - or could be large - Congress eliminates preferred investment rates entirely, and for good measure passes a "one-time" wealth tax, to pay down the debt of course.

 

[blazerboy30]

As for the overall idea, it's basically a scam to allow Romney to pay zero tax.

barfo

How is that? He's said multiple times, and his website says it as well, that capital gains tax would be 0% for those making less than $200k. Does Romney make less than $200k?

 

[blazerboy30]

Smells like some more neo-con bullshit

If it maintains the approximate proportion of tax burden paid by the rich, what do you have against it?

 

[maxiep]

I was incorrect and I apologize. It's no capital gains for those making less than $200K. Thanks for the corrections everyone.

 

[maxiep]

http://taxprof.typepad.com/taxprof_...ction-cap-good-economics-better-politics.html

 

[Denny Crane]

My understanding is the $25K blanket deduction is just that. A replacement $25K deduction to make up for all the others they might get rid of.

I suggested a flat tax with a flat $4K per person refund in an older thread and people seemed to really like it. The $25K deduction is a real convoluted way to come to what I proposed. A person in the 25% tax bracket would get back about $6K after the deduction in the suggestion made in the OP.

 

[PapaG]

Romney pays 14% now. Under the Romney/Ryan proposal, he'd pay 0%, or very close to it.

Guess who is going to make up for the tax Romney won't be paying anymore?

Hint: his name rhymes with DaLincolnBones.

barfo

Romney pays 14% on gains from already fully-taxed income. That is with deductions and charity, by the way.

 

[PapaG]

0% capital gains on those making less than $200k is a great idea. I am in that category now, yet we pay capital gains on our investments even when they aren't realized.

barfo has no fucking clue what he's talking about, yet again.

 

[barfo]

0% capital gains on those making less than $200k is a great idea. I am in that category now, yet we pay capital gains on our investments even when they aren't realized.

barfo has no fucking clue what he's talking about, yet again.

Your hostility is misplaced in this case. I merely commented on what maxiep said. The fact that the maxie's premise turned out to be false does not mean my conclusions were illogical. Reducing cap gains for all taxpayers to zero would indeed reduce Romney's taxes to zero, or nearly so.

Sorry to hear the "consulting" business isn't doing so well.

barfo

 

[barfo]

Speaking of "blanket deductions", I see that the rest of us are subsidizing the Romney's dressage horse - $77,000 tax deduction for 2010.

barfo

 

[blazerboy30]

Your hostility is misplaced in this case. I merely commented on what maxiep said. The fact that the maxie's premise turned out to be false does not mean my conclusions were illogical. Reducing cap gains for all taxpayers to zero would indeed reduce Romney's taxes to zero, or nearly so.

barfo

At least you're admitting you don't have any idea about Romney's tax plan proposal. Interesting that you bash it even though you know nothing about it.

 

[barfo]

At least you're admitting you don't have any idea about Romney's tax plan proposal. Interesting that you bash it even though you know nothing about it.

I wasn't bashing Rmoney's tax plan proposal, apparently.

Is there some reason I should care about Romney's tax proposal? It will be irrelevant in just a couple of weeks.

barfo

 

[Denny Crane]

Romney pays 14% on gains from already fully-taxed income. That is with deductions and charity, by the way.

His income is not already fully taxed.

 

[Denny Crane]

Speaking of "blanket deductions", I see that the rest of us are subsidizing the Romney's dressage horse - $77,000 tax deduction for 2010.

barfo

To the tune of $49, according to your link.

 

[blazerboy30]

I wasn't bashing Rmoney's tax plan proposal, apparently.

True. You were bashing what you thought was Romney's tax proposal. Probably even more ridiculous.

Is there some reason I should care about Romney's tax proposal? It will be irrelevant in just a couple of weeks.

barfo

Well, it is election season. You should know about both candidates' policies and ideas on major issues, unless you admit that you're one of the common sheep.

 

[PapaG]

I wasn't bashing Rmoney's tax plan proposal, apparently.

Is there some reason I should care about Romney's tax proposal? It will be irrelevant in just a couple of weeks.

barfo

You thought you were bashing Romney's capital gains proposal. Until it turned out your were wrong, of course.

 

[barfo]

To the tune of $49, according to your link.

In 2010. He can recover the remainder in future years, according to my link.

barfo

 

[Denny Crane]

In 2010. He can recover the remainder in future years, according to my link.

barfo

I'm sure he doesn't need the loss/deduction in any future year.

 

[barfo]

I'm sure he doesn't need the loss/deduction in any future year.

I'm sure he doesn't need it, I'm sure he will take it anyway.

barfo

 

[Denny Crane]

I'm sure he doesn't need it, I'm sure he will take it anyway.

barfo

Sure. Like you use the coupons in the newspaper to buy cat food when you have a dog to feed.

In other words, if he needed or wanted to take it, he already would have.