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Republicans are looking at limiting deductions for mortgage interest, charitable donations and other traditional areas as well as taxing employer-provided health benefits as ways to raise taxes without calling it a tax increase.
Some Republicans feel the plan violates the party’s promise to hold the line on taxes but others say it is not a tax increase, per se, but simply a revamping of the current tax code.
Still others call it smoke and mirrors.
“It’s sham politics,” one GOP insider tells Capitol Hill Blue.
Toomey’s plan calls for lower tax rates in exchange for stricter limits on itemized deducations.
The plan is already drawing fire from special interest groups like the giant National Association of Realtors, which considers mortgage interest deductability sacred.
A statement from the trade association says it “remains committed to preserving” the mortgage interest deduction, adding that “there could not be a worse time for even considering changes to those incentives.”
Taxing health insurance benefits could blow up on Republicans at a time when they are trying to make President Barack Obama’s health insurance “reform” a major campaign issue in the 2012 election.
“We can’t have it both ways,” grumbles one GOP congressional staff member.