Presidential candidate Fred Thompson issued a tax plan that would give taxpayers the option of choosing a simplified flat tax.
Under Thompson's plan, the simplified flat tax would provide two tax rates: 10 percent for joint filers with incomes of up to $100,000 ($50,000 for singles) and 25 percent for incomes above that amount. The standard deduction would double to $25,000 for joint filers and $12,500 for singles. The personal exemption would increase to $3,500. Capital gains and dividends would be taxed at today's 15 percent rate. There would be no other tax credits or deductions.
"My plan allows Americans to have greater control of their own money," Thompson said in a statement.
The former senator's plan also calls for permanently extending the 2001 and 2003 tax cuts. He wants to permanently repeal the estate tax, as well as the alternative minimum tax. The plan would reduce the top corporate tax rate from 35 percent to no more than 27 percent.
Thompson also wants to permanently extend the ability of small businesses to write off equipment purchases of up to $125,000 per year. In addition, his plan would update and speed up depreciation schedules, so that assets such as computers could be depreciated sooner than three years.
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