How does it stimulate the economy to cut taxes and then raise them the same amount? Romney's plan is to cut tax rates and then get rid of deductions, credits, and loopholes to make up the difference. How is that a tax cut? The federal government still extracts the same amount of money from the economy.
Why hasn't he been more specific about which deductions, loopholes, and credits he's going to ax? Do we not have a right to know or is that a secret?
Before asking that question, you first have to remember how the US government works. The President cannot lower tax rates or end deductions without first negotiating with Congress about his proposals, so at this point all Romney can tell us is the outline of what he will propose to Congress and the details will emerge from negotiations between the WH and Congress.
Tax deductions for the most part are government incentives intended to direct spending or investment in certain directions instead of allowing free markets to guide consumers and investors. Vigorous free markets induce price competition and direct capital to its most productive (highest valued) use, so lowering tax rates will put more money into the hands of consumers and investors and ending the government's attempts to micromanage the economy through deductions will allow free market competition to stimulate the economy.
