Thompson Calls for Option of a Simplified Income Tax
November 26, 2007
By MARC SANTORA
nytimes.com
Fred D. Thompson recommended yesterday that people have the option to pay a simplified tax on their income.
The proposal was part of Mr. Thompson’s plan to overhaul the nation’s tax code.
Mr. Thompson, who is seeking the Republican nomination for president, would allow individuals and families to stay with the existing tax structure or to choose to have their earnings taxed under a system with only two rates — 10 percent on income of up to $100,000 for joint filers and $50,000 for singles, and 25 percent on income above these amounts.
The proposal has been advocated by, among others, the Republican Study Committee, a conservative caucus in the House of Representatives.
An analysis by the Congressional Joint Committee on Taxation, which looked into the kind of plan Mr. Thompson proposed, found that the federal government would stand to lose at least $2.5 trillion in revenue over 10 years.
But Mr. Thompson, a former senator from Tennessee, said in an interview yesterday on “Fox News Sunday” that such studies “always overestimate the losses to the government” and that tax cuts would spur the economy, leading eventually to greater revenues.
Mr. Thompson’s proposal is the most specific yet among the leading Republican candidates in support of a flat tax. Rudolph W. Giuliani, for one, had assailed the flat tax while he was mayor of New York but recently spoke in favor of it without endorsing a specific plan.
In detailing his plan, Mr. Thompson joined other leading Republicans in calling for making permanent the tax cuts instituted during the Bush administration and repealing the estate tax. He also called for reducing the corporate tax rate to 27 percent from 35 percent.
Additionally, Mr. Thompson favors abolishing the alternative minimum tax, which was created to make sure that the wealthiest Americans did not use loopholes and deductions to avoid paying their share of taxes.
While many Democrats and Republicans agree on the need to revise the structure of the tax since it has increasingly been hitting upper-middle-income families, scrapping it would cost the government billions of dollars in revenue.
Copyright 2007 The New York Times Company |
