The president's tax reform panel is coming under fire from conservatives who don't like the idea of trading away the mortgage interest deduction and other middle-class tax breaks just to eliminate the alternative minimum tax.Sen. Jim DeMint, R-S.C., and the National Taxpayers Union are calling for a complete replacement of the tax code with a fairer and simpler system. "By just capping two deductions and reforming the AMT, the tax panel would make the IRS tax code more complicated, less fair, more anti-growth than today," Sen. DeMint said. NTU president John Berthoud said curtailing popular deductions for mortgage interest and health care "only makes political sense when it's done as part of a new law that lowers the tax rate and simplifies the tax base." The NTU said it wants the panel to adopt a national sales tax or a flat income tax. At an Oct. 11 meeting, the tax reform panel discussed a proposal to reduce the $1 million mortgage cap on the interest deduction to around $300,000. At the next meeting on Oct. 18, the panel plans to discuss a proposal to limit the deductibility of state and local taxes, including property taxes. Panel members are preparing to submit their final tax reform recommendations to President Bush by Nov. 1.

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