Republicans have officially gotten on board with raising revenue for deficit reduction — by curbing tax breaks in conjunction with lowering tax rates.
The idea of curbing tax breaks isn’t new. Tax policy experts have touted it for years and Democrats, including President Obama, have proposed it in one form or another. That’s why it may offer a key to resolving the fiscal cliff.
The biggest benefits of curtailing breaks: It broadens the base of income and activities subject to tax, simplifies the code and reduces what tax geeks call “distortion” — that is, the phenomenon of individuals and companies choosing to do one thing over another because of the tax implications.
Which, if any, federal income tax deductions are you willing to give up as long as your tax rate doesn’t increase?