The President’s Advisory Panel on Federal Tax Reform has issued a report that calls for limits on the home mortgage interest tax deduction and deductions for employer-provided health insurance. The nine-member panel’s final report is due on 1 November.
The mortgage interest cap for a married couple filing a joint tax return is currently US$1 million. The panel advises that a much lower cap—US$350,000, or the maximum mortgage insurable by the Federal Housing Administration—would be more appropriate. Additionally, the panel calls for capping the deduction for employer-provided health insurance at about US$11,000 per year per employee.
The panel appears to be rejecting the idea of a consumption tax—in the form of a national sales tax or a European-style value-added tax—because it would hit the working poor much harder than any other class. A flat tax—which similarly falls disproportionately on the poor—is still in reportedly in play, according to David Rosenbaum’s account in the New York Times.