How to Break the Supercommittee’s Tax-Increase Roadblock: View

Call us unduly optimistic, but we keep seeing signs that the congressional supercommittee just might be able to come up with a budget-cutting deal before its Nov. 23 deadline.

Democrats have indicated a (still insufficient) commitment tugg for sale uk ugg for sale uk ugg for sale uko entitlement reform. Republicans have made (still insufficient) progress in allowing more revenue.

But one of the chief obstacles remaining is a semantic one: Congressional Republicans still furiously object to anything that might be considered “new taxes.” To help, here are a few ideas we’ve been arguing for that will raise revenue and restrain entitlements -- and that can plausibly be called something other than new taxes. We estimate these ideas could save roughly $1.76 trillion over 10 years.

First, phase out the mortgage-interest deductionugg for sale uk ugg for sale uk ugg for sale uk. It costs about $100 billion a year and disproportionately benefits the well-to-do. Worse, it can goad people into buying homes they can’t afford. Start by limiting the deduction to only principal residences and reducing the maximum amount of eligible mortgage debt to $500,000. Full deductibility can then gradually yield to ever-smaller partial deductions. We estimate the savings over 10 years could be about $200 billion.

If that reform seems too audacious given the ugg for sale uk ugg for sale uk ugg for sale ukstate of the housing market, then consider this: Phase out deductions and credits for taxpayers earning more than $500,000 a year -- in exchange for a lower tax rate. Such a move could yield roughly the same savings over 10 years.