Mitt Romney is putting on the table cutting hugely popular middle-class income tax deductions used by millions -- for mortgage interest and medical costs.
The Republican presidential nominee suggested the changes could be part of a plan that includes a 20 percent cut in tax rates across the board, continuation of upper income tax cuts that Obama wants to end and a comprehensive tax overhaul plan he has so far declined to flesh out in detail, the Associated Press reported.
In Denver preparing for Wednesday night's debate, Romney gave an interview Monday night to local TV station KDVR.
He said, "As an option you could say everybody's going to get up to a $17,000 deduction. And you could use your charitable deduction, your home mortgage deduction, or others — your health care deduction, and you can fill that bucket, if you will, that $17,000 bucket that way. And higher income-people might have a lower number."
A Romney adviser told the AP changes in other areas — like the personal exemption and the deduction or credit for health care — would also be taken into account if deductions were limited as Romney suggested. Combining changes to those two areas with the limit on deductions would maintain Romney's goal of keeping tax burdens the same for wealthy and middle-income taxpayers, the adviser said.
Though Romney's plan would hit high net-worth people hardest, it would still require raising taxes on some middle-class Americans to cover the cost of his proposal to cut everyone’s tax rates by 20 percent.
“It goes back to the same problem that we’ve raised,” Howard Gleckman of the non-partisan Tax Policy Center told Talking Points Memo. “He’s promised all these things and he can’t do them all. In order for him to cover the cost of his tax cut without adding to the deficit, he’d have to find a way to raise taxes on middle-income people or people making less than $200,000 a year. This might do that, but without way more details than he’s providing there’s no way to know who gets hit and how much they get hit by.”
“This would generate a lot of revenue,” Gleckman said. “It would ask some people to pay more clearly, but whether or not it would hit the middle class depends on what you define as middle class — whether you believe someone making $199,000 is middle class.”