Monday, December 17, 2012
Mr. Romney’s proposal to limit itemized deductions to a fixed dollar amount, which surfaced during the campaign as a way to close loopholes for the wealthy and broaden the tax base, has attracted a surprising amount of bipartisan support, given its origins in conservative Republican circles. ...
The political appeal of a proposal that limits deductions without actually naming any — inciting the powerful interests and lobbyists that support them — seems obvious. But many tax experts said that a fixed dollar cap is anything but the evenhanded approach to closing loopholes it appears to be.
Moreover, without addressing larger tax preferences, like a lower rate on capital gains, it does almost nothing to cure the so-called Buffett problem, in which Warren Buffett’s secretary pays a higher effective rate than her billionaire boss. It doesn’t even raise much revenue.
Some tax experts have gone so far as to say it’s a conservative Trojan horse, a stealth tactic that protects the very wealthy while targeting Democrats who itemize deductions and live disproportionately in high-tax states like New York and California. It would also affect donors who support elite colleges, universities, museums — even experimental theater — which are perceived as havens for liberals.