Tax Lawyer's Blog

Senat0rs Ron Wyden (D-OR) and Judd Gregg (R-NH) published an op-ed in yesterday’s Wall Street Journal titled A Bipartisan Plan for Tax Fairness:  The U.S. Shouldn’t Have One of the Highest Corporate Rates in the World in which they propose a tax simplification plan (emphasis added):

There is an important issue looming on the congressional horizon: how to address the expiration of the Bush tax cuts at the end of this year. We believe there is a consensus way forward, which is why we are introducing the Bipartisan Tax Fairness and Simplification Act of 2010. …

We reduce the number of tax brackets from six to three—15%, 25% and 35%—and simplify the tax code for individuals and families by eliminating the AMT. By nearly tripling the standard tax deduction, creating new opportunities for tax-free saving, and eliminating restrictions on personal exemptions and itemized deductions, under our proposal most Americans with an annual income of up to $200,000 will fare as well or better than they do under the current system. Furthermore, they won’t have to worry about maintaining the records and receipts necessary to document itemized deductions.

In order to encourage investment, our legislation would exempt taxpayers from paying taxes on the first 35% of their long-term capital gains income….

Another key element of our proposal is a flat corporate tax rate. Currently, U.S. corporations are at a competitive disadvantage internationally. They pay the second highest tax rate in the industrialized world. Our legislation would reduce the top corporate tax rate, which can exceed 35%, and replace the existing six corporate rates and eight brackets with a single flat rate of 24%. …

We make fiscally responsible tax reform possible by eliminating many of the specialized tax breaks strewn throughout the tax code. Our legislation maintains the most popular tax breaks like the mortgage interest deduction and the health-care tax exclusion, while eliminating specialized exemptions such as a company’s ability to deduct as a business expense punitive damages resulting from lawsuits.

(Hat Tip: Paul Caron)

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