Center for American Progress

Comments per the ‘Advisory Panel?s Request for Comments #2’
Article

The President’s Advisory Panel on Federal Tax Reform
1440 New York Avenue NW, Suite 2100
Washington, DC 20220
[email protected]

Dear Advisory Panel,
This letter contains comments per the “Advisory Panel’s Request for Comments #2.”
As requested, our comments at this time provide our suggestions for reforming the tax code.

Sincerely,

Cassandra Q. Butts
Senior Vice President and Coordinator of Economic Policy

John S. Irons
Director of Tax and Budget Policy

Read the full letter

American Progress Tax Reform Proposal – Summary

The Center for American Progress Tax Plan is a comprehensive reform of the current tax code.  Overall, the reform raises about $500 billion when compared to the president’s policy.  Under our plan, approximately 70 percent of the population would receive a tax reduction, which would average about $600 for those earning under $200,000.  Taxpayers who earn more than this amount would likely see an increase in their tax share.

The Center for American Progress Tax Plan would:

  • Tax Each Source of Income the Same-tax wealth according to the same rate structure as ordinary income.
  • Reduce the Dependence on Regressive Payroll Taxes-remove the employee side of the Social Security Payroll Tax, and remove the cap on the employer side.
  • Enhance the Take-Home Pay of Lower-Income Taxpayers-reduce the marriage disincentive of the EITC, expand eligibility for the child tax credit.
  • Reduce the Number of Income Tax Brackets-three-rate structure with rates at 15 percent, 25 percent, and 39.6 percent. The three tax rates would apply to brackets of taxable income of $0 to $25,000; $25,001 to $120,000; and $120,001 and above. These brackets would be indexed for inflation.
  • Close Corporate and Individual Loopholes-close existing loopholes that allow corporations and wealthy individuals to avoid paying their fair share of taxes.
  • Eliminate the need for the Alternative Minimum Tax-overhaul the entire income tax code and eliminate the AMT.
  • Offer Tens of Millions of Americans New Opportunities to Save and Create Wealth for Retirement-replace the deduction-based retirement savings tax incentive with an across-the-board 25 percent refundable tax credit for retirement savings.

Read the full letter

For more information read our Tax Plan.

 

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.