Based on calculations using data provided by the Joint Committee on Taxation, the committee says the average middle-class family of four could have an extra $1,300 per year from the combination of lower tax rates in the plan and higher wages due to a stronger economy.
"Washington needs to … start offering concrete solutions and debating real policies that strengthen the economy and help hardworking taxpayers. Tax reform is one way we can do that," Camp said in a press statement.
"This legislation does not reflect ideas solely advanced by Democrats or ideas solely advanced by Republicans, nor is it limited to the halls of Congress," said Camp. "Instead, this is a comprehensive plan that reflects input and ideas championed by Congress, the Administration and, most importantly, the American people," he added.
• New Individual and Corporate Rate Structure: Flattens the code by reducing rates and collapsing today's brackets into two brackets of 10 and 25% for virtually all taxable income, ensuring that over 99% of all taxpayers face maximum rates of 25% or less. The plan also reduces the corporate rate to 25%.
• Larger Standard Deduction: Provides an inflation-adjusted standard deduction of $11,000 for individuals and $22,000 for married couples.
• Simpler, Improved Taxation of Investment Income: Taxes long-term capital gains and dividends as ordinary income, but exempts 40% of such income from tax – resulting in a three percentage point decrease from the maximum rates individuals pay today on such income while also achieving the lowest level of double taxation on investment income in modern history.
• No AMT: The plan repeals the Alternative Minimum Tax for individuals, pass-through businesses and corporations.
• Simplifies the Income Tax Code: The plan repeals over 220 sections of the tax code; cutting the size of the income tax code by 25%.
For more highlights of the proposal, visit the House Ways and Means Committee page and the House Tax page.