[quote=UCGal]I have a question.
I heard during the election and during the early fiscal cliff discussions a proposal to “limit deductions”…
Isn’t that AMT on steroids? The GOP claims to hate the AMT…
What is the difference?[/quote]
The “limit deductions” scheme, particularly during the campaign, was to protect what the GOP considers the “job creators”. Those with very high income. Romney’s plan was to be revenue neutral, so eliminate deductions and at the same time decrease top rates. The current scheme is to increase revenue. Both end up with the largest benefits going to those with the highest income, who currently benefit very little from deductions. (If income is $2M or more annually, the maximum home mortgage deduction, for instance, will only save under current law and interest rates, about $17K. A savings of less than 1% of income. But for someone earning $300K, it would be more than 5%.)
Note that not a single politician involved in these negotiations on either side of the aisle has ever identified a particular deduction they’re ready to eliminate. They’re afraid to face the special interests that want to protect each and every deduction that has become essential to their particular piece of the economy. What will the NAR have to say when they seriously begin talks of eliminating the mortgage deduction?
