The Committee for a Responsible Federal Budget has a helpful post on how a cap on itemized deductions might work:
In terms of revenue raised from these caps, it depends on the details, but it would likely be very significant and progressive. Almost all high earners currently itemize more than $17,000 of deductions; in fact, the average itemizer deducted $26,000 in 2011 (and $174,000 for the top 1 percent). However, it is not clear whether this proposal would generate enough revenue or enough progressivity to offset Gov. Romney’s tax cuts. As more information becomes available, we will provide additional analysis. [Emphasis added]
I think it is unlikely that we’ll see much more on this from the Romney campaign before the election, but it is an interesting concept.
Update! The Romney deduction cap does, however, raise an interesting question. How much would it cost Romney himself? Consider the following from a post by Michael Shear of the New York Times:
Mr. Romney and his wife, Ann, donated about $4 million to charity in 2011, but claimed only $2.25 million as a deduction. The campaign said that Mr. Romney’s tax liability would have been far lower in 2011 had the Romneys claimed the full deduction for their charitable contributions.
$2.25 million is $2.233 million over the deduction cap Romney floated, and the Republican nominee suggested that the cap might be lower for high-income households. To be sure, Romney has also proposed cuts to marginal tax rates. But one assumes that this would have a significant impact on Romney’s federal income tax liability.
I mention this in part because conservative proposals to lower the tax burden on capital income have at times been viewed through the lens of Mitt Romney’s self-interest.