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The Most Important Tax Break Is the One That Nobody Talks About

2012/taxbreak.jpgbyline‚ Nov. 16‚ 2012

If you really want to raise revenues, the Holy Grail isn't capping tax deductions, as Romney proposed, or raising the top marginal rate, as Obama proposed. It's taxing investment income like ordinary income.

Suddenly, Republicans are all about increasing tax revenues from rich people. In the last weeks of the campaign, Mitt Romney talked about capping itemized deductions for high-income taxpayers (which, unfortunately for his arithmetic, would not nearly have compensated for the lower tax rates he proposed). John Boehner has told his caucus that they have to be willing to accept increased tax revenues (but out of the other side of his mouth says that tax rates cannot be increased). Glenn Hubbard, in the Financial Times, also suggests increasing revenues by closing loopholes: "Tax deductions should be scaled back, especially in the areas of mortgage interest, charitable giving and employer-provided health insurance."