Following his early June plan to re-structure government with measures addressing poverty, healthcare, national security, regulatory reform and Constitutional issues, Ryan’s final building block for America’s future proposes sweeping tax changes.
“With this plan, everyone in our country — the anxious and the eager, the Old America and the New America — can unite and build a confident America,” Ryan told reporters Friday morning.
Ryan and the GOP’s plan proposes deep cuts to both individual and corporate tax rates, disentangles individual tax code, introduces a corporate consumption tax and overhauls international tax rules.
For individuals, the GOP plan would reduce the top tax rate from 39.6 percent to 33 percent, would scrap itemized deductions with a single, higher deduction, in most cases doubling the individual deduction, but allow the earned income tax credit (EITC), and deductions on interest for mortgage, charitable donations and education to remain in place.
Similarly for individuals, Ryan’s plan would do away with the estate tax and the alternative minimum tax, but cut rates on investment income. The proposal allows taxpayers to deduct 50 percent of net capital gains, stock dividends and interest income to produce news rates of 6, 12.5 and 16.5 percent to spur new investment.
For corporate America, Ryan’s strategy includes reducing the corporate tax rate from 35 percent to 20 percent, a plan which the GOP says will encourage job creation and allow the U.S. to remain competitive with China and Japan.
Additionally, businesses would be able to write off capital investment fully and immediately, which, Ryan says, allows companies to expense capital costs and grow businesses.
Finally, the proposal would reform taxes corporations based on the locality of their product(s) market. Currently, the U.S. imposes a tax on profits overseas when re-invested in the U.S. Ryan’s plan moves to a “territorial” strategy, which would remove taxes placed on foreign profit.
Watch Friday’s entire press conference below:
[AP] [Washington Post]