*CUT THE MIDDLE-CLASS RATE FROM 25% to 15%
This will move brackets to 10%, 15%, 28%, 33%, and 35%. Projected top end for the 15% bracket in 2013 would be about $86,000 for a single person and $143,000 for a married couple.
* ELIMINATE CAPITAL GAINS TAX FOR MIDDLE CLASS
Those individuals formerly subject to the 25% income tax rate, now 15% under this plan, should no longer be required to pay taxes on capital gains.
* KEEP THE TOP RATE FOR CAPITAL GAINS & DIVIDENDS AT 15%
Both the capital gains tax rate and the dividend tax rate have been 15% for almost a decade. Let's make them permanent at that level so people can plan their businesses and investments. This would also encourage saving and investment. A higher tax rate on dividend income would greatly affect senior citizens, who disproportionately hold dividend-paying stocks.
* END THE CAPITAL GAINS TAX ON INFLATION
Currently, the capital gains tax is based on the difference in the original purchase price of the asset and the sale price of the asset. However, some of this difference, or "gain," is the result of inflation. We should index this difference to adjust for inflation when calculating the capital gains tax on assets.
*ELIMINATE THE DEATH TAX & THE GIFT TAX
These taxes represent less than 1% of federal tax revenue. The death tax is the cruelest of all taxes, often forcing American families to sell farms and businesses at the moment a family member dies. Moreover, people should be able to give their own after-tax money to their children, or anyone else they choose, without talking to anyone in the government and without paying taxes on the same money again.
*GREATER DEDUCTIONS FOR EDUCATION EXPENSES
The unemployment rate for college graduates is 4.2% but 13.1% for those without a high school diploma. There is no better way to create jobs than to educate our children and adult learners. We should increase the tax deduction on student loans and qualified higher education expenses and allow all families to be eligible.
*REPEAL THE ALTERNATIVE MINIMUM TAX (AMT)
Repealing the AMT was included in the President's budget, and I agree with him. The AMT was created in 1969 to prevent 155 wealthy taxpayers from using loopholes in the tax code to avoid paying taxes altogether. Congress passes a "patch" every year or two to minimize the reach of this tax; however, if they do not act, some 34 million taxpayers will incur this tax in 2012. There is a broad agreement that this is both an inadvertent and unfair effect.
*MAKE ALL WITHDRAWALS FROM IRAs TAX- & PENALTY-FREE FOR UNEMPLOYED
While the unemployment rate is over 6.5%, create a temporary exemption for those collecting unemployment for a minimum of 12 weeks in which they can make withdrawals from their IRAs for general expenses without being subject to the 10% penalty. Currently, there are multiple exemptions for disbursements, including home down payments, college expenses and health insurance premiums