What might be over-looked in the budget discussion is this proposal from within the Ryan alternative GOP Budget:
– Tax Reform. Our budget does not raise taxes, and makes permanent the 2001 and 2003 tax laws. In fact, we cut taxes and reform the tax system. Individuals can choose to pay their federal taxes under the existing code, or move to a highly simplified system that fits on a post card, with few deductions and two rates. Specifically, couples pay 10% on their first $100,000 in income (singles on $50,000) and 25% above that. Capital gains and dividends are taxed at 15%, and the death tax is repealed. The proposal includes generous standard and personal exemptions such that a family of four earning $39,000 would not pay tax on that amount. In an effort to revive peoples’ lost savings, and to create an incentive for risk-taking and investment, the budget repeals the capital gains tax through 2010 for all taxpayers. (h/t: WSJ)
During last night’s conference call with Rep. Bob Goodlatte, I asked him if he thought such a proposal is meant to demonstrate that the GOP really is committed to being a party of fiscal discipline…and whether or not such proposals stand a chance of passing in the future.
Also, be sure to read Jim Riley’s post on this subject. He says:
This is the way that tax reform must happen. Give people a choice between the old tax system and the new and let the old way shrivel up. It won’t be long before nearly everyone is opting for the flat tax.
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