WH report: Deduction cap won’t make a dent in debt

A realistic cap on itemized deductions that protects charities and the middle class would raise only about $450 billion over the next decade, according to new White House estimates — too little to make a serious dent in the soaring national debt.

The estimates are contained in a document, obtained by The Washington Post, that is being shared with congressional Democrats and other White House allies as President Obama and top Republican leaders negotiate for an agreement on how to avert the year-end “fiscal cliff.”

It offers a rebuttal to Republican arguments that eliminating loopholes and deductions could raise just as much money for deficit reduction as raising the income tax rates on top earners.

More details on the report here.

Lori Montgomery covers U.S. economic policy and the federal budget, focusing on efforts to tame the national debt.
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