Replace the income tax brackets with two rates
What the document says“The Treasury should work with Congress to simplify the tax code by enacting a simple two-rate individual tax system of 15 percent and 30 percent that eliminates most deductions, credits and exclusions.”
The chapter says the 30 percent bracket should begin at or near the Social Security wage base, so that income and payroll tax together act as a nearly flat tax on wage income above the standard deduction. It separately asks that capital gains and qualified dividends be taxed at 15 percent, that capital expenditure be expensed immediately and that capital gains be indexed for inflation.
What the document actually says“The Treasury should work with Congress to simplify the tax code by enacting a simple two-rate individual tax system of 15 percent and 30 percent that eliminates most deductions, credits and exclusions.”
Replace the tax bands with just two. One at 15 percent and one at 30. Drop most write-offs.
Income tax now has several bands. The book wants only two. Most special write-offs would go. A higher earner would pay 30 percent.
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