The final report of the President's Advisory Panel on Tax Reform attracted a heavy dose of criticism even before it was released, failing to satisfy the interest groups most concerned about tax reform.The panel offered two options. Plan A, the "Simplified Income Tax Plan," would create four tax brackets of 15, 25, 30 and 33 percent; replace the standard-deduction personal exemption and the child and earned income tax credits with family and work credits; reduce long-term capital gain rates; replace the mortgage interest deduction with a credit; end tax-free health insurance from employers; and eliminate the deduction for state and local taxes.
Plan B, the "Growth and Investment Tax Plan," would create three tax brackets of 15, 25 and 30 percent, and levy a 15 percent tax on dividends, capital gains and interest. It would end the complexities of the current depreciation system and adopt immediate write-off of business investments.
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