Idea of the Day: Restore the Progressivity of the Tax Code

Restore the progressivity of the code by reducing the number of income tax brackets from six to three at the rates of 15 percent, 25 percent, and 39.6 percent; and by removing the employee component of the Social Security payroll tax, immediately reducing by 6.2 percent the tax rate all Americans pay on the first $90,000 of earnings. The reform provides a substantial tax cut to about 70 percent of taxpayers earning under $200,000. Higher income individuals, who have disproportionately received the benefits of the Bush tax changes, would see an increase.

For more on the Center's policies on tax reform, please see:

• Create a Fair and Simple Tax Code: 15 New Ideas
• Responsible Investment: A Budget and Fiscal Policy Plan for Progressive Growth by David Madland and John Irons