[The modification to Romney's original plan was that he will now] cap the amount of deductions wealthy people can take. Basically this means that Romney’s plan would limit the amount of money rich people could save via the tax code at a finite level (he’s offered several possibilities: $17,000, $25,000, or $50,000). This is probably actually a very good idea, considering that rich people enjoy a whopping 80 percent of the savings from itemized deductions, but is it enough to pay for Romney’s $5 trillion cut?
No. Not even close.
While it’s difficult to estimate because Romney has provided so few details, even the most generous version of Romney’s deduction cap would raise about only $1.3 trillion — about a quarter of the full cost — according to their new study, which was released yesterday afternoon. And that doesn’t include the additional roughly $2.5 trillion it would cost to extend all the Bush tax cuts, as Romney plans to. So he’s over $6 trillion short for the decade, and starting with a big deficit.