From an editorial in Thursday’s Washington Post:
Gary Cohn, a Trump administration cheerleader for tax reform, says the administration is “trying to get rid of all of the loopholes and all of the deductions that mostly wealthy people use.”
Unfortunately, that is not the case. The administration tax plan takes aim at one deduction that wealthy people in mostly Democratic states use disproportionately – and leaves others hardly touched. The proposal would preserve two of the most expensive and wealth-favoring tax breaks: the deductions for home mortgage interest and for charitable giving. Still on the chopping block is the state and local tax deduction, which helps taxpayers in high-tax states more than those in low-tax states.
Republicans will be tempted to enact a big, deficit-widening tax cut instead of trying to close anyone’s loopholes. That would be disastrous – for the economy, for future generations and for the credibility of the GOP, which has spent the past decade pretending to care about the national debt.
A fairer way would close loopholes without singling out one tax break, one area of the country or one set of wealthy people. Congress could limit the total value of the tax breaks that taxpayers can claim. Americans would still take deductions, but they would face stricter limits on how much they could benefit overall.
This idea is not new, and it is not partisan. A deduction cap would be a fairer, more honest, more balanced policy than what the administration is peddling now.