President George W. Bush has promised broad leeway to a panel he will appoint soon to consider an overhaul of the tax code but conservative allies of the White House see tax cuts on investments as crucial to any reform.
Republican economists are floating ways to pay for reforms, which Bush has said must be “revenue neutral,” but their proposals are already drawing fire.
One idea would involve eliminating a provision in the federal tax code that allows individuals to write off the cost of state and local taxes.
“Getting rid of a deduction that benefits high-tax states would be a way to pay for an overhaul of the tax code,” said Stephen Moore, president of the Club for Growth, which advocates investment tax cuts as a way to spur economic growth.
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