Lee Introduces Family Fairness Tax Reform Plan

Statement

Today Senator Mike Lee introduced a tax reform plan that would replaces much of today's complex tax system with a new, simple structure that provides solutions for America's ongoing opportunity crisis and ends the discrimination of parents in the tax code. The Family Fairness and Opportunity Tax Reform Act is a pro-family, pro-growth plan that incentivizes social mobility, promotes middle-class economic security, and improves opportunity for all Americans.

"If there is any single group of people in the entire country whose equal opportunity to pursue happiness we should make sure to protect, it is our ultimate entrepreneurial and investor class: America's moms and dads," said Sen. Lee. "The family has emerged as perhaps the most important institution in our economy. It is an incubator of economic opportunity, an indicator of economic success, and grows more economically important every day."

"The current tax code singles out parents of young children for unfair and extremely expensive discrimination. It is what I call the "parent tax penalty,' a glitch in the federal tax code that forces parents to contribute to senior entitlement programs not once, but twice. My plan levels the playing field to treat all taxpayers more equally. For a middle-class family, this is an immediate, potentially life-changing reform."

Under this plan, a married couple with two children making the median national income of $51,000 would see a tax cut of approximately $5,000 per year.

"In short, the Family Fairness and Opportunity Tax Reform Act would restore opportunities to working parents and their children to pursue happiness that right now federal policy unfairly denies them," Lee added.

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More Information:

How it Works

Establishes two individual income tax rates: 15% on all income up to $87,850 -- and twice that amount for married couples - and 35% on all income above that;
Offsets the parent tax penalty by providing an additional $2,500-per child tax credit, available to all parents of dependent children and applicable to payroll taxes as well as income taxes;
A $2,000 personal credit to offset the removal of the 10% bracket and the personal exemption;
A new charitable deduction that would be available to all taxpayers, not just current itemizers;
A new mortgage interest deduction, also available to all home-owners, but capped at $300,000 worth of principal;
Eliminates special interest loopholes
Repeals Obamacare taxes and the AMT
Eliminates the state and local deduction
Revenue expected to be 16-20% of GDP

What it Does

Simplifies the tax code and lowers the top marginal rate
Eliminates an unfair and dysfunctional double standard
Vastly improves the economic security of middle-class Americans
Equalizes a system that is rigged in favor of the wealthy and well-connected
Provides substantial tax relief for most Americans
Creates pro-growth incentives to encourage new jobs and investment
Focuses deductions on the families and communities who need it most
Responds to the inequality crisis facing the country today
Consistent with conservative reform principles

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