Stop me if you've heard this before.
Popular personal itemized deductions, including the mortgage interest tax break and write offs for charitable deductions, would be radically scaled back or eliminated in exchange for cutting income tax rates and leaving enough extra money to help reduce the deficit.
That essentially was the Zero Plan proposed by the co-chairs of the special bipartisan deficit reduction panel, officially known as the National Commission on Fiscal Responsibility and Reform, created last year by President Obama.
But when Alan Simpson, former GOP Senator from Wyoming, and Erskine Bowles, a Democrat who served as President Bill Clinton's chief of staff, issued their report late last year, it was dead on arrival.
Heck, the Simpson and Bowles couldn't even get a majority of their panel colleagues to approve a final plan.
Go back a few more years and the blue ribbon tax reform panel appointed by George W. Bush also called for simplifying the tax code by trading the mortgage interest deduction for a home-related tax credit.
That proposal also was immediately shelved. Seems there was a little problem back then with the idea of doing away with a tax break loved by homeowners and the housing industry, especially as an election year was approaching.
So you have heard this before.
Try, try again: Sen. Pat Toomey, now serving on the Congressional super committee charged with finding at least $1.2 trillion in deficit cuts by Nov. 23, probably has, too.
But that hasn't deterred the Pennsylvania Republican from serving up many of the controversial tax proposals again.
"This is a far more practical way to start to scale back the influence and costs of tax expenditures in the code by kind of glopping them together and capping them," Maya MacGuineas, president of the Committee for a Responsible Federal Budget, told the Associated Press. "You're not picking the winners and losers."
MacGuineas might be biased. She was part of a group that came up with a similar tax plan for the National Bureau of Economic Research.
And I suspect that taxpayers losing some tax deductions will disagree about not picking winners and losers in the proposed tax code changes.
It's true that taxes would be simpler and that is something folks say they want ... until they find that simpler means it will cost them more taxes.
Taxpayers who claim the standard deduction instead of itemizing, and that's about 70 percent of filers each year, would see their taxes cut. But the rest of the filers who itemize deductions might find themselves paying more.
Sweetening the tax change pot: Toomey hopes to offset that by cutting the top income tax rate from 35 percent to 28 percent. The bottom income tax rate also would be smaller, going from 10 percent to 8 percent and the rates in between would be reduced as well.
||2013 Rates Without
|10 percent||N/A||8 percent|
|15 percent||N/A||12 percent|
|25 percent||28 percent||20 percent|
|28 percent||31 percent
|33 percent||36 percent||27 percent|
|35 percent||36.9 percent||28 percent|
The GOP leadership is divided on Toomey's plan. And the Senator admits that he's willing to make changes to get a version that could pass the super committee and ultimately the full Congress.
I don't know if there is enough time before the Nov. 23 deadline to make that many changes.
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