Is Mitt Romney's tax plan the key to avoiding the fiscal cliff?

The Week
Mitt Romney holds a copy of his plan to increase jobs and boost the economy during a talk in 2011: The former Republican presidential candidate may have been onto something with his tax plan.
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Mitt Romney holds a copy of his plan to increase jobs and boost the economy during a talk in 2011: The former Republican presidential candidate may have been onto something with his tax plan.

Democrats say Romney's proposal to raise revenue by slashing deductions for the rich could reduce deficits — without the tax-rate hikes that Republicans despise

As a showdown brews in Washington over how to avoid the fiscal cliff, "Democrats are latching on to an idea floated by Mitt Romney" to break the impasse, says Jonathan Weisman at The New York Times. The defeated Republican presidential nominee campaigned on a plan to use a cap on income tax deductions for the wealthy to help offset an across-the-board tax-rate cut. President Obama dismissed the idea as "sketchy," saying it wouldn't come close to paying for Romney's proposal. Democrats in Congress, however, say it just might be the key to crafting a balanced debt-reduction deal that gets more revenue from the super wealthy without hiking tax rates, which Republican House Speaker John Boehner has called "unacceptable." Did Romney show Democrats the way to reach a deal with the GOP?

This might be the perfect compromise: Capping deductions for the rich could be the solution, says Scott Galupo at The American Conservative. We're talking about a huge pot of money here. Adopting Romney's deduction limits — without his plan to cut an additional $3.6 trillion in taxes —"would give Obama the revenue he wants, and Republicans could at least claim not to have raised tax rates." That's "a deal that both sides could live with."
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It's a start, but Democrats have to give, too: Romney's idea would help, but "there's a catch," says Deborah Solomon at Bloomberg News. Obama has promised not to squeeze anything more out of people making less than $200,000, and you'd have to cap deductions at $17,000, for everyone, to come up with the equivalent of the $1.5 trillion in new taxes Obama wants as part of a debt-reduction deal. Soaking the rich only gets you so far — to resolve the crisis, the middle class will have to pay more, too.
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We're still at square one: Cutting deductions just doesn't increase revenue the way raising tax rates does, says Suzy Khimm at The Washington Post. Obama has floated a deduction cap he could live with, but it would only raise $164.2 billion over ten years. Letting the Bush cuts expire for families making $250,000 or more brings in $1 trillion. The bottom line is that to come up with a deal that works, Republicans have to accept higher tax rates and Democrats have to accept a heavier burden for the middle class, but both sides still swear they won't budge.
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