Industry News - Regulatory Updates
May 3, 2012
Romney tax goals may be difficult to achieve together
Although he has not fully detailed his tax plan, some analysts say that presidential candidate Mitt Romney's proposals may be in conflict with each other.
He has expressed a desire to reduce individual income tax rates by 20 percent, broaden the tax base, keep the current rates on dividends and capital gains and maintain the tax-burden distribution across different income groups. These ideas may prove mutually contradictory under some circumstances, Martin Sullivan of the nonprofit corporation Tax Analysts recently told Bloomberg. In order to follow through on them all, the candidate may find himself forced to reduce or eliminate tax breaks for home mortgage interest and charitable deductions.
Romney has indicated in the past that tax rate reductions would be offset in part by removing or reducing some tax breaks, as well as suggesting that eligibility for deductions and credits might be modified so that middle-income families can qualify for some that would not be available to higher-income Americans.
When speaking about his tax policies, Romney has said he would like to eliminate the estate and alternative minimum taxes and hold the capital gains and dividend tax rate at 15 percent, averting their scheduled increase in the near future. These goals may make it difficult for him to balance income tax cuts and tax breaks, the news source notes.
If his policies are carried out, estate tax planning would cease to be an issue at the federal level, making financial advisors' and planners' work much easier as they would only have to contend with state laws. A stable rate on day trading taxes would also benefit investors.