Newt Gingrich’s proposed tax plan would cut federal revenue by nearly $1.3 trillion, or 35%, according to an analysis by the nonpartisan Tax Policy Center.
Much like Texas Gov. Rick Perry’s plan, Gingrich proposes to let taxpayers choose if they want to calculate their tax using the current code, or a flat 15% rate. (Perry’s plan gave the option of a 20% flat rate.)
Because the plan allows taxpayers to choose how they want to calculate what they owe, nobody would be worse off. But, as was the case with Perry’s plan, the idea that taxpayers would have to calculate their liability twice might turn some people off.
The plan would do away with the Alternative Minimum Tax and most deductions and credits, but would keep deductions for mortgage interest and charitable gifts and the earned income, child and foreign tax credits. Capital gains, dividends and interest income would not be taxed.