How Mitt's going to pay for his income tax cuts: Capping deductions.

Yesterday Mitt suggested that he'd limit the dollar amount on deductions that a taxpayer could use -- an effective cap on your combined itemized deductions:

"As an option you could say everybody's going to get up to a $17,000 deduction. And you could use your charitable deduction, your home mortgage deduction, or others — your health care deduction, and you can fill that bucket, if you will, that $17,000 bucket that way. And higher income people might have a lower number."

$17,000 may seem like a high number, but it is not that difficult to reach for two groups: The middle and upper-middle income households.

This cap on deductions means that even a mild medical setback will result in a bigger hole in your income.  It also will result in a soft ceiling on home prices, especially in the first several years of a deduction cap's implementation, while pushing up the lower end of home prices.

I know that there is a reasonable argument for getting rid of the mortgage deduction altogether; for that matter it applies to all itemized deductions.  However, the transition to getting rid of, or capping, deductions, is a treacherous one that imperils an economy, especially one that is slow in growth.

But again, the problem with Mitt's solution to increase growth, is to cut taxes but then eliminate deductions in order to keep his tax cuts revenue-neutral.  If a growth plan is to remain revenue neutral, how effective can it be in increasing growth or cutting the debt?

Curious.