The Bipartisan Policy Center, formed in 2007 by former Senate Majority Leaders Howard Baker, Tom Daschle, Bob Dole and George Mitchell, today released a 140-page report by its Debt Reduction Task Force co-chaired by Pete Dominici and Alice Rivlin, Restoring America’s Future (Executive Summary).
Here are the components of the plan to Create a Simple, Pro-Growth Tax System:
1. Cut tax rates; broaden the tax base; boost incentives to work, save, and invest; and ensure, by 2018, that nearly 90 million households (about half of potential tax filers) no longer have to file tax returns.
- Cut individual income tax rates and establish just two rates – 15% and 27% – replacing the current six rates that go up to 35%.
- Cut the top corporate tax rate to 27% from its current 35%, making the United States a more attractive place to invest.
- Eliminate most deductions and credits and simplify those that remain while making them better targeted and more effective.
- Replace the deductions for mortgage interest and charitable contributions with 15% refundable credits that anyone who owns a home or gives to charity can claim.
- Restructure provisions that benefit low-income taxpayers and families with children by making them simpler, more progressive, and enabling most recipients to receive them without filing tax returns.
2. Establish a new 6.5% national Debt Reduction Sales Tax (DRST) that – along with the spending cuts outlined in this plan – will reduce the debt and secure America’s economic future.
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