Shouldn’t the presumptive Republican nominee for president be talking about reducing tax liability, not raising it? Specifically after President Obama’s “Buffett Plan” has come under severe criticism (at least from me), you would think Romney would have taken note.
Well, Mr. Romney, the newly anointed presumptive Republican nominee for president (now that Santorum has finally realized he didn’t really have a chance at winning the nomination), said he would eliminate or limit the mortgage interest deduction for second homes and the state income tax deduction and state property tax deduction.
I don’t mind limiting the deduction for interest paid on mortgages on second homes, as that is definitely a personal expense, but eliminating the deduction for taxes paid to the state would just be taxing everyone twice. Forget double dipping, that’s more like taking half the cake and coming back for more!
A little explanation on these deductions- when computing his federal income tax an individual can deduct from his taxable federal income the taxes he pays the state for income or real estate taxes. In other words, if I make $100 in a year and I get taxed from the state government $10 on that income, I can tell the federal government I really only earned $90. Considering you have to pay that money straight away in your taxes, it makes sense not to tax us the amount that we have to pay in taxes. According to Romney’s plan, however, well be taxed on the $10 twice, once by the state, and then also by the federal government! This may not sound like a lot, but if you are to pay $20,000 in taxes to the state and your federal bracket is 30%, this new rule will add another few thousand dollars in taxes!
I don’t know about you, but if I wanted to get elected, this is not what I would be saying.