Tax reform: same time next year?
If the President’s off-the-cuff answer is to be believed, your mortgage interest deduction is safe for the time being:
During a question-and-answer session in
“You think I’m against affordability?”
“Maybe you’re hinting at whether or not the mortgage deduction would be part of a plan,” Bush responded. “I don’t think you have to worry about the mortgage deduction not being a part of the income-tax law.”
A panel appointed by Bush last year recommended reducing the tax deduction for mortgage interest as part of a larger plan to simplify the tax code.
Bush, who has called the tax code a complicated mess, is having the Treasury Department review the panel’s recommendations.
“Will the panel members please find their seats?”
As I wrote a few months back, there is great value in a trial balloon:
An elected official pondering the political calculus of an action can always convene a gaggle of wise heads, solicit their views, and then observe the political fallout from a safe distance.
At no cost, you can let it go:
“You think maybe the President wants us to let go?”
But the White House, which had initially considered rolling out a plan this year on tax simplification, has delayed that initiative. Some Republicans have said some of the recommendations from the panel, such as the one on mortgage interest, might generate too much controversy, especially in the current congressional election year.
It is a president’s prerogative to set the agenda, but before setting sail, a wise captain checks the political waters to see if they are laminar or turbulent. I incorrectly thought they would be laminar:
The passback and the tax proposal. Will the passback include the tax-reform proposals? I think it will, because, as I’ve previously posted, repeal of the Alternative Minimum Tax is too big to ignore, and too popular not to propose.
So, if I’m right [We’ll check you later! — Ed.], the passback will propose tax reform (including AMT repeal) — maybe not the full-blown commission report, but several of its more substantial elements.
However, a couple of Supreme Court fights and a shooting gaffe chewed up much of the President’s political capital, changing the prospects of major tax reform.
That’s one beauty of political vaporware: you can always bring it back!
President and Congress contemplating another budget cycle
