Josh Barro on the Romney Cap on Itemized Deductions

Josh Barro’s update to his recent post on the proposed (floated?) Romney cap on itemized deductions struck me as interesting:

An astute reader points out that I neglected the effect of graduated income tax rates in doing this calculation. A married couple with no kids making $150,000 a year would break even on Romney’s proposal if they currently take $35,728 in itemized deductions, not $43,600. With an income of $60,000 a year, the break-even would come if the couple currently takes deductions of $22,920.

How generous this makes Romney’s proposal depends crucially on how he treats health benefits. Currently, employer-provided health benefits are excluded from income and not even reported on the tax return. If Romney is not including that health exclusion under his $17,000 cap, then it will be rare for middle-income filers to see a tax increase. But many middle income families earn a large fraction of their income in health benefits and could see tax increases if he is including them.

This is something the Romney campaign should flesh out. Romney also did not address whether the $17,000 cap is adjusted for filing status. If married couples get a substantially higher allotment than singles, that could adjust for the health care issue.

I’m guessing that Romney is not including the health exclusion under the cap, which is part of why I agree with Josh: if this is the main vehicle for base-broadening, revenue neutrality will likely prove an elusive goal. We have seen various analyses of how the base might be broadened, but this cap on itemized deductions goes in a very different direction. 

Reihan Salam — Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

Most Popular

Law & the Courts

Obstruction Confusions

In his Lawfare critique of one of my several columns about the purported obstruction case against President Trump, Gabriel Schoenfeld loses me — as I suspect he will lose others — when he says of himself, “I do not think I am Trump-deranged.” Gabe graciously expresses fondness for me, and the feeling is ... Read More
Politics & Policy

Students’ Anti-Gun Views

Are children innocents or are they leaders? Are teenagers fully autonomous decision-makers, or are they lumps of mental clay, still being molded by unfolding brain development? The Left seems to have a particularly hard time deciding these days. Take, for example, the high-school students from Parkland, ... Read More
PC Culture

Kill Chic

We live in a society in which gratuitous violence is the trademark of video games, movies, and popular music. Kill this, shoot that in repugnant detail becomes a race to the visual and spoken bottom. We have gone from Sam Peckinpah’s realistic portrayal of violent death to a gory ritual of metal ripping ... Read More

Romney Is a Misfit for America

Mitt’s back. The former governor of Massachusetts and occasional native son of Michigan has a new persona: Mr. Utah. He’s going to bring Utah conservatism to the whole Republican party and to the country at large. Wholesome, efficient, industrious, faithful. “Utah has a lot to teach the politicians in ... Read More
Law & the Courts

What the Second Amendment Means Today

The horrifying school massacre in Parkland, Fla., has prompted another national debate about guns. Unfortunately, it seems that these conversations are never terribly constructive — they are too often dominated by screeching extremists on both sides of the aisle and armchair pundits who offer sweeping opinions ... Read More

Fire the FBI Chief

American government is supposed to look and sound like George Washington. What it actually looks and sounds like is Henry Hill from Goodfellas: bad suit, hand out, intoning the eternal mantra: “F*** you, pay me.” American government mostly works by interposition, standing between us, the free people at ... Read More
Film & TV

Black Panther’s Circle of Hype

The Marvel Cinematic Universe (MCU) first infantilizes its audience, then banalizes it, and, finally, controls it through marketing. This commercial strategy, geared toward adolescents of all ages, resembles the Democratic party’s political manipulation of black Americans, targeting that audience through its ... Read More