Romney's $25,000 "basket of deductions": state and property taxes will no longer be deductible!

[bluestate10]

12. "Many upper income Americans assume that Romney would lower their taxes. They should think again"

The above is not completely right. It should be that many upper middle class americans. The people that are going to be hurt under Romney's plan are the people in the $150,000-$600,000 total income bracket that have high state taxes, mortgage deductions, charitable deductions and adjustments to short-term investment income deductions. To people in that group, the $25,000 allotment will vaporize fast. People in the $700,000-$1,000,000 brackets will feel some pain from being bracketed by Romney, but their earnings will soften the blow. People earning above $1,000,000 will hardly notice the bracketing, those are the people that will get big breaks from Romney's plan, because as you noted, the sources of their income come from capital gains and other investment income that Romney has cleverly chosen to exempt those earnings from his plan. Under Romney's plan, the rich will simply shift their income stream to sources that Romney will not tax, simply because those people can afford to pay specialists who re-direct their money.

Romney is cleverly trying to get people that have incomes below $100,000 excited about his plan and get their votes. What those people have to realize is that they likely don't have enough in deductions to meet the $25,000 allotment. What is likely to happen to them is they will face periodic explosions in their state, and local taxes that will force them to take out loans to meet. The interests paid on those loans over a one year period is not deductible now and won't be under Romney's plan, so that money will be lost.