“It avoids a case-by-case dispute over each individual deduction, some of which are very popular and are political sacred cows,” he said.
Floating the cap serves two purposes for Romney, Nivola said: It provides “cover in campaigning,” since he’s been dogged for specifics, and it’s a “good strategy for the legislative process,” if Romney wins the White House.
Nivola said he could envision a compromise between Romney’s dollar-figure cap and the percentage-of-income cap suggested by Democrats.
“This shows good faith about being serious about curbing deductions. It was important for Romney to establish that for his credibility,” he said.
George K. Yin, chief of staff of the Joint Commission on Taxation from 2003 to 2005 and now a professor at the University of Virginia School of Law, agreed:“It’s a good strategy because we’re talking about extremely sensitive items — the mortgage interest deduction or the charitable contributions deduction — so this is a nebulous cap that lets you say to taxpayers, ‘We’re not taking away any deductions. We’re letting you fill up this bucket however you want.’ ”
Yin noted the overlap between the Romney and Obama proposals. “The similarity is more than coincidental. It’s clearly strategic,’’ he said. “Both want to limit the government’s tax expenditures, these deductions that have started eroding the tax base.’’
For taxpayers wondering how the limit Romney mentioned might affect them, Mark Misselbeck , an accountant at Katz Nannis & Solomon in Needham, said the impact for individuals was difficult to judge without knowing whether other changes Romney has proposed would be enacted.
In a back-of-the-envelope calculation, he said that if Romney cuts rates by 20 percent and limits deductions to $17,000, but everything else remained the same, a four-person family with a pretax income of $80,000 and a $320,000 home mortgage would see a reduction of their overall tax bill by several hundred dollars.
But, he cautioned, “the devil’s always in the details.”
Alan Wirzbicki can be reached at firstname.lastname@example.org.