Explanation from tax experts, please!

[mazzarro]

When Mittens says that "I am not reducing taxes on the high income earners; I am only lowering the rate of taxation and eliminating loop holes" - what exactly is the difference between "reducing taxes" and "lowering the rate of taxation" in this context?

[CJCRANE]

2. I'm no expert but some people think that if you lower tax rates on the rich

they will actually end up paying more in taxes (because they are less likely to avoid and evade taxes). Maybe that's what he means.

However, experience from the Bush era proves that that's wrong.

[BlueStreak]

3. If he were telling the truth, it would be reasonable. But he's lying. Thats's the problem.

It makes perfect sense to say, "I don't plan to reduce the total amount of money the rich pay in taxes. But I am lowering the tax rate and offsetting that by eliminating 'billionaire loopholes' so the total taxation ends up the same."

Well Gov. Romney, many Americans think that the rich paying an average tax rate of only 16% -- not counting the trillions in income they are able to shelter -- is not fair, that the rich are not paying their fair share today.

But OK, let's say you want to keep their total tax burden the same at the same time you are reducing the tax rate. Then please tell us the loopholes you plan to eliminate.

{crickets}

New day, same old shit. They just want to keep cutting the tax rates and we'll never see any of the loopholes closed.

[kestrel91316]

4. Well, Rmoney isn't lying, per se. He's prevaricating.

[kelly1mm]

5. I will give it a shot. IN THEORY (not that this is what he would do) you can do the following:

this is very simplified, say that a person who makes $400,000 current tax rate is 40%. However, the median deductions from income for someone making 400k is 125k. So, in that case (very simplified for illustration of the point only) his tax would be:

400,000 - 125,000 = 275,000 x 40% = $110,000

Now, lets reduce the rate of taxation to 30%, but at the same time, get rid of all deductions for those making over $250,000. In that case his tax would be:

400,000 X 30% = $120,000.

So, by lowering the rate of taxation, but getting rid of deductions, you could end up with a higher net tax bill. Obviously you could tweak it to reach net current equilibrium or a tax cut by changing the rate slightly.

[On the Road]

6. Thank You -- I Was About to Post Something Similar

Romney, of course, won't specify which deductions he would eliminate or how much more tax they would generate.

And this applies only to Federal Income Tax. Is it true that he is actually proposing to eliminate capital gains tax altogether?

[Igel]

7. No, he doesn't make any promises.

That's not foolish. Nor is it duplicitous.

Only a fool puts in cement the course of action he'll take once he's in completely different circumstances over a year later. (R) nailed Obama for it in 2008, and they were wise idiots. Had he made specific promises--and I think he made too many as it was--it would only serve to emphasize foolishness or arrogance.

Heck, I ran for student government in May (of one bygone year) and had a very nice idea of what I'd be doing in July. I was fairly specific, had distinct goals. Even knew what I'd want done by August so I could work on my August-September goals.

Then I got elected, looked at all the crap on my desk, looked at the existing problems that the incumbent didn't feel like mentioning because, well, you don't talk about all the problems you haven't dealt with, looked at the problems coming down the pike, and what I really needed to be doing in July was completely different from my foolish "promises." (So, of course, I left for Europe for a month.)

In fact, had I kept my promises I'd have made things a lot, lot worse. Doing nothing was better than doing what I said I'd do. In the end I stuck to my principles, and they said to do the opposite of what I promised in a lot of cases.