With the country trillions of dollars in debt, will we ever get our fiscal house in order?
Former Pennsylvania Governor Ed Rendell says responsible cuts to Medicare and Social Security would help a lot, but revenue increases are also needed. He says one way to do that is with a cap on federal tax deductions.
“For average working people who make… 40 to $80,000 dollars. We never have more than $25,000 in deductions in a year. That wouldn’t affect us at all,” says Rendell.
On “The Gary Nolan Show,” he says he supports the deduction cap Mitt Romney proposed during his run for president. He says Romney’s idea to cap federal tax deductions to $25,000 wouldn’t slam the middle class.
“And for rich people who give 10 million to an art museum, they’re not doing that to get a tax deduction. They’re doing that because they’re civic minded, or they want their name on a building or whatever. So it would have very little effect on charitable giving,” Rendell says.
Critics of that plan say a greater tax deduction often leads to greater gifts to charity. Rendell says a deduction cap should be used along with broad tax reform to boost government income. He also says the best way to reduce the national debt is to make cuts to entitlements like Medicare and Social Security.