"Gang of Six" tax proposals

I don't know about any of you, but I didn't see any specifics mentioned in the news reports yesterday about the tax proposals that are part of the newest compromise proposal to fix the debt ceiling. But I am happy to report that RIA included them this morning in their daily update. Here they are:

  • A single corporate tax rate between 23% and 29% and shift to a competitive territorial tax system.
  • Tax simplification that involves reducing the number of tax expenditures (i.e., tax breaks) and reducing individual tax rates. There would be three tax brackets with rates in the range of 8%–12%, 14–22%, and 23%–29%. To the extent future Congresses find that the dynamic effects of tax reform result in additional revenue beyond initial targets, this revenue would go to additional rate reductions and deficit reduction, not to new spending.
  • Permanent repeal of the alternative minimum tax (AMT).
  • Reform, rather than elimination, of tax breaks for health, charitable giving, homeownership, and retirement.
  • Retention of the earned income tax credit and child tax credit, or creation of an alternative that would provide at least the same level of support for qualified beneficiaries.

The bipartisan plan calls for the Senate Finance Committee within six months to report a comprehensive tax reform package using the listed items to deliver “real deficit savings by broadening the tax base, lowering tax rates, and generating economic growth.”