Tax Reform Advisory Panel Recommendations - Other Tax Provisions
National Association of REALTORS®
Recommendations of the President's Advisory Panel on Tax Reform
Other Provisions
| Current Law | Simplified Income Tax | Growth and Investment Tax | ||
| Tax Rates – Individuals are taxed in six brackets at rates ranging from 10% to 35%. | Four income tax brackets ranging from 15% to 33%. | Three tax brackets ranging from 15% - 30%. | ||
Tax Rates – C corporations are taxed at a 35% rate. | C corporations would be taxed at 31.5%. | C corporations would be taxed at 30%. | ||
Interest and Dividends – Taxed at 15% through December 31, 2008. After 2008 taxed at ordinary income rates. | Some dividends and interest would be tax-exempt as part of a major overhaul of current law savings vehicles. Caps imposed on tax-exempt savings. Excess over caps taxed as ordinary income. | Interest and dividends taxed at 15%. | ||
Charitable Contributions – Fully deductible for individuals who itemize | Deductible to the extent they exceed 1% of income. | Same as Simplified Income Tax | ||
Employer-provided Health Insurance -- Employers may deduct the full cost of health insurance premiums they pay for their employees. Self-employed persons may deduct the full cost health insurance premiums. Persons who are not self-employed and/or who pay for all or part of their health insurance may deduct the cost of premiums only to the extent they exceed 7.5% of adjusted gross income. | Employers who provide health insurance for employees may deduct the full cost of premiums. If premium costs exceed a stated ceiling (likely $11,500 for family coverage and $5400 for single person coverage), any amount of premium in excess of the ceiling is treated as income to the employee. (Similar to current law for life insurance premiums.) Any person (including self-employed persons) who does not receive employer-provided health insurance would be permitted to deduct premium costs up to the ceiling amount. | Same as Simplified Income Tax. | ||
Alternative Minimum Tax – Separate, complex tax schedule for individuals and corporations | Repealed for individuals and corporations | Repealed for individuals and corporations |
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