Posted Tuesday, Nov. 8, 2011, at 5:42 PM
Lori Montgomery gets it, via the details of the newest Republican supercommittee float.
The offer envisions a tax code rewrite that would lower rates for everyone while raising overall tax collections by $250 billion, mainly by limiting the value of itemized deductions such as write-offs for home mortgage interest, state and local taxes and other expenses. In addition, Republicans are offering to use a less generous measure of inflation to adjust formulas government-wide, a proposal that would push people more rapidly into higher tax brackets.
The rub: They would base new, lower rates not on the returning Clinton tax rates, but on the expiring Bush tax cuts. The new idealized top tax bracket would fall to 28 percent. Contrast that with, say, Wyden-Coats, which removes loopholes but yanks in revenue by keeping the top rate at 35 percent. You start to see why this is a probable non-starter.