Looking at Romney's numbers, I applied them to my in-laws, both retired and in their 80s (I do their taxes for them). They have about $40K/yr income (SS & some annuity investments). Currently for 2012, they would get a standard deduction of 11,900, plus 2,300 for being over age 65. Their 2 personal exemptions would be 7,600. So, their total deductions would be 21,800, and their tax liability would be 1,860 (if Romney considers them in his 47%, he missed the boat, they do pay taxes). Under Romney's plan, their total deductions are capped at $17K, so they lose $4,800 in deductions, which drives their taxable income up by the same amount from 18,200 to 23,000, and their tax liability goes up to 2,064, an increase
of $204. Calculations from 2012 tax table, with Romneys rate adjustment:
17,400 X 8% (dropped from 10%) = 1,392
5,600 X 12% (dropped from 15%) = 672
Total Tax Liability = 2,064
So Romney happily tells us in the debate, with his plastic TV preacher smile, that his tax plan won't raise taxes on the Middle Class, but rather will reduce them. Well, this doesn't seem to be the case for my in-laws, now does it? Now an increase of $204 isn't a backbreaking amount, but when compared to the whopping big savings many wealthy will get, something doesn't add up. It seems as if Romney doesn't really think his plans through, simply doesn't understand the numbers, or is just throwing stuff out to make it to like he knows what he is talking about, but then again, this is the Romney we all know and love.
Also, he proposes dropping the top rates for the wealthiest by 10 percentage points (35% to 25%), but dropping the Middle Class rate by only 5 percentage points (25% to 20%). Who gets the better deal, especially when you consider that the top rate applies to a higher level of income, resulting in a much greater dollar savings AND because we have a graduated system, the wealthy will have part of their income getting the Middle Class savings as well as their own. Spin it anyway you like, but it's pretty obvious whose butts Romney is kissing.