Skip to comments.G.O.P. Tax Plan Seeks Lower Rates and Fewer Brackets, Aides Say
Posted on 02/25/2014 2:51:02 PM PST by Theoria
The Republican plan to overhaul and simplify the nations tax code is expected to call for a cut in the top corporate income rate to 25 percent from 35 percent, and a reduction of the seven individual tax brackets to two at 10 percent and 25 percent according to aides familiar with the proposal.
The proposal, which is set to be released Wednesday after nearly three years of behind-the-scenes work, is the brainchild of Representative Dave Camp of Michigan, the chairman of the Ways and Means Committee, and it reflects the long-held tax overhaul goals of the Republican-passed budget.
Though about 99 percent of individual tax filers would not have a tax rate above 25 percent under the plan, the remaining 1 percent, whose income is above about $450,000, would be subject to a 10 percent tax surcharge on certain types of income, according to aides familiar with the plan. The surcharge would affect salaried professionals, such as lawyers and accountants, while excluding those whose income comes from production, manufacturing and farming.
The current top tax rate for individuals is 39.6 percent.
The release of the long-awaited plan to overhaul the tax code will come on the same day that Mr. Camp is set to shepherd through the House a bill to stop new Internal Revenue Service regulations on political social welfare groups. That underscores a quandary facing House Republican leaders as they head into the midterm elections: Should they limit their legislative agenda to political bills tailored to aid Republican campaigns, or should they take big risks on ambitious policy proposals, such as simplifying the tax code?
(Excerpt) Read more at nytimes.com ...
Also, lop off about 50,000 pages of the tax code. Better yet, burn the whole fetid mess and start from scratch.
OK, let me guess. This will be just like what happened when Reagan was president. Tax rates were lowered in exchange for closing “loopholes” and eliminating a bunch of deductions.
The treacherous Dems later raised the rates without restoring any of the deductions.
What we need is a permanent solution to high taxes.
Sadly, that would still leave around 23,000 pages of code.
History provides a solution:
system collapse followed by another iteration of the same cycle
/things don’t change because people don’t change
A simpler FLAT tax or a national sales tax both have pros and cons to economic expansion. But when it comes to personal liberty, the sales tax wins hands down.
Am anxiously awaiting this. Will/can the MSM ignore it?
Too bad people can’t remember pain. It’s a great teacher.
“Though about 99 percent of individual tax filers would not have a tax rate above 25 percent under the plan, the remaining 1 percent, whose income is above about $450,000, would be subject to a 10 percent tax surcharge on certain types of income, according to aides familiar with the plan.”
Why am I not surprised a RINO like Camp would come up with a plan that penalizes many of the job creators? Whatever happened to flattening the income tax, instead of making it more progressive?
I read that 3 times, and I still don’t understand...Is the author stating that for people (households?) over $450,000 their total liability would be 35% (10 + 25)? If so, this is not an improvement, but I huge step back...
I would agree but since these people were burning up the lines to get Congress to vote amnesty for get about it.
Actually, the top income tax rate ($400,000 and up) is 39.6% right now.
Madison wrote that of all taxes, the excise tax was the least obnoxious.
A ONE TIME collected, sales tax is in effect an excise tax.
But I would take a flat tax also. Anything other than this system.
The problem with this is the more you cut taxes on upper class persons the less they care about cutting spending. They are no longer limited government conservatives when they get more money from the government in contracts, grants, subsidies etc. than they pay out. In fact the more we lower their taxes the fewer upper class conservatives we have and the more feckless the remaining ones are. So I vote no on this. Of course if they reduce spending and secure the border we might give this a go, but until that I vote no.
1. Generous exemptions for initial earned income (wages and pension payments) of:
$14,000 for single taxpayers
$28,000 for married/registered domestic partner couples
$21,000 for single legal head of household
$9,000 for each legal dependent in household
2. Any income above the exemptions will be taxed at a flat rate of 18.75%.
3. Eliminate the alternate minimum tax, estate tax, FICA (Social Security) tax, gift tax, and self-employment tax.
4. Exclude bank account interest, capital gains and stock dividend payments from earned income computation.
5. Allow businesses to depreciate any equipment used for running a business within one year.
The result would be a tax form so simple that it makes the IRS 1040-EZ form look complicated by comparison. Because tax filings are so simple now, this cuts the cost of yearly tax compliance by 75% per year, meaning instead of spending an estimated $500 BILLION per year on tax compliance, we now free up circa $375 billion per year for more productive purposes.
Because we no longer tax bank account interest, capital gains and stock dividend payments, this means all the tax incentive to keep savings and capital formation STAYING in the USA. This means millions of jobs, thousands of factories, and hundreds of corporate headquarters come back to the USA, dramatically lowering the unemployment rate. It also means everyone will keep their savings in the USA, meaning our banks are fully-funded and better able to withstand any economic calamity down the road.
So what are we waiting for?
Sure. We have cut taxes until recently. We haven’t cut .gov.
Sounds good, but I hope they will make sure Marxists and RINOs can’t raise it again.
When are they going to bring bills forward to stop political targeting and end the behavior with heavy criminal charges and civil fines. How about a loss of pension and benefits?
Can you end the taxation of corporations under that plan? You’d kill two birds with one stone - it would end the government regulation of non-profits and end corporations buying politicians for tax favors.
Right, but with mortgage and other deductions, not really. If the ate eliminating deductions, potential net loss.
Amen! How about we scrap it all and set a flat tax of 16% for everything, income, fica etc... for all parties, no deductions, no special carve outs. You pay this on your income period. And scrap the business income tax altogether.
Good point. But anyone in the $400,000+ tax bracket already has Alternative Minimum Tax considerations to deal with, so they’ve lost the ability to deduct things like mortgage interest anyway.