Bush Tax Panel Considers Limiting 2 Popular Deductions (middle class&lower [View All]

[IChing]

By DAVID E. ROSENBAUM
Published: October 11, 2005
WASHINGTON, Oct. 11 - President Bush's tax advisory commission indicated today that it would not propose replacing the income tax with a national sales tax or a value-added tax but would recommend modifications in the popular tax deductions for mortgage interest and employer-provided health insurance.

The commission, scheduled to make its recommendations to the president by Nov. 1 on how to change the tax system, did not take votes and did not address ticklish details, but its consensus on many important issues was clear.

"We're getting focused on the income tax as a base," said the panel's chairman, Connie Mack, a former Republican senator from Florida.

That is mainly what led to an examination of ways to modify the deductions for mortgage interest and health insurance, two of the largest tax breaks now available to individuals. Together, these two deductions will cost the Treasury about $250 billion this year, with the benefits going disproportionately to the most affluent taxpayers.

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