Source: NCPA
The Lee-Rubio Tax Plan is a step in the right direction, and makes some significant improvements over the current tax code, according to a new report by National Center for Policy Analysis Senior Fellow Pam Villarreal.
“The Lee-Rubio plan reduces our current seven tax brackets to just two,” says Villarreal. “However, it would raise the rate for lowest income earners by 5 percentage points, and some earners in the $150,000 to $200,000 range would face marginal tax rates 7 percentage points higher than under current law.”
The new plan would move America from its progressive tax structure to a bifurcated flat tax:
- All income earned up to $75,000 for singles and $150,000 for joint filers would be taxed at 15 percent.
- All income earned over those threshold would be taxed at 35 percent.
- Thus, for a married couple filing jointly, the lowest income earners would pay more (rising from 10 percent to 15 percent), while the highest income earners would pay less (falling from 39.6 percent to 35 percent).
Additionally, the plan would lower the corporate tax rate to 25 percent, allow 100 percent deductibility of capital investments in the same year they are made, and would eliminate the estate tax.
“The Lee-Rubio Tax Plan would make a crucial step towards eliminating the double taxation of income and capital that is rampant in our tax code,” says Villarreal, “and put an end to the punitive corporate taxes that push American firms overseas.”