Conservative group pushes compromise tax reform plan

Lawmakers on both sides of the aisle are expected to press for tax reform in 2012, just as they did a year ago. But while House Republicans are set to discuss the issue at their annual retreat, some Washington observers are highly skeptical a tax overhaul can be completed in an election year.

{mosads}In addition to bringing rates down, Brill’s plan targets deductions for mortgage interest and state and local taxes — tax preferences that have survived, in one form or another, previous reforms of the tax code.

Under the plan, the mortgage interest deduction would morph into a 12 percent, non-refundable credit — the same basic proposal called for by the Bowles-Simpson Commission.

Brill would also phase out the deduction for state and local taxes over five years. The 1986 tax reform, the last broad revamping of the tax code, scrapped the deduction for general sales tax.