Study: Tax Deduction Cap Would Raise $1.3 Trillion

From the Wall Street Journal today -- the economic credence to a basic tenet of the Romney Tax Plan according to the Tax Policy Center:

  • Republican presidential nominee Mitt Romney‘s suggestion for capping itemized deductions at $25,000 would generate about $1.3 trillion in additional revenue over 10 years, according to a new analysis by the Tax Policy Center.
  • The concept of limiting deductions, which is most closely associated with economist Martin Feldstein, was also offered last year by Sen. Pat Toomey (R., Pa.), who was seeking a way forward during the now failed deficit-cutting supercommittee talks.
  • The Tax Policy Center found that capping deductions at $17,000 would bring in $1.7 trillion over 10 years, even after factoring in a 20% rate cut and the repeal of the alternative minimum tax. It said that a $50,000 cap–which would allow for more and bigger deductions–would raise $760 billion.
  • the study leaves out the fact that a lot of other tax breaks could still be pared or trimmed.

Link to full story here.  Link to study here.