Geithner: Deduction Caps Don't Raise Enough to Offset High-End Tax Cuts

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Lawmakers seeking to use Republican presidential candidate Mitt Romney's idea of capping deductions as a way to offset an extension of the 35 percent tax rate may find themselves disappointed once they do the math, Treasury Secretary Geithner says. The notion of using a flat-dollar limit on itemized deductions has supporters on both sides of the aisle, according to congressional aides. However, the portion of the extension of the 2001 and 2003 tax cuts that applies only to families earning more than $250,000 is estimated to cost roughly $85 billion per year and, Geithner says, the only way to raise that much money from a deduction cap is to set it at a level that would impact many middle-income taxpayers.

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