Conservatives Rip Mortgage Break Proposal

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.