Romney’s Tax Reform

Apparently, Romney wants to eliminate tax deductions for the rich. This suggests that the non-rich will have the usual deductions. Of course, this adds complexity to the tax code, but this is not the biggest reason that I am against this sort of device. There must be a transition from non-rich to rich. The transition can be abrupt or it can be gradual. If it is gradual as the Earned Income Tax Credit is gradually removed, all it does is increase the marginal tax rate for those in the transitional range of incomes. That is, their marginal rate is higher than that of the rich. If it is abrupt, it makes the marginal tax rate infinite at the point of transition between non-rich and rich. This creates an obstacle to upward mobility. We have this problem between low and middle incomes. I don’t like it there and I won’t like it between middle and high incomes either.