[credit provider=”ABC/Matthew Putney”]
Not much attention was paid to former Speaker of the House Newt Gingrich’s flat tax proposal when he first introduced it — owing to his formerly left-for-dead status in the polls. But as Gingrich surged to the top, the Tax Policy centre took a look at his flat tax plan, and found a massive tax cut for the wealthy.Gingrich’s plan calls for a federal flat tax at 15 per cent, that would be optional, so as not to penalise those better off under the current system — meaning those earning in the highest brackets end up saving the most money. That said, every tax bracket would see lower effective rates under the Gingrich plan.
Overall, federal revenues would drop by $1.28 trillion — or 35 per cent — through 2015 compared to current government policy, a massive shortfall that would have to be made up with deficit spending, or painful spending spending cuts.
Families and individuals earning more than $1 million a year would see their effective federal tax rate drop almost 20 per cent — saving on average $607,221. The millionaires average rate of 11.9 per cent would be lower than the average rate paid by a family earning between $40,000-50,000 a year. In fact, it would be lower than the average rate paid by any taxpayer earning between $40,000 and $1,000,000.
As Gingrich takes on a the mantle of the front-runner, expect more of these analyses on Gingrich’s many policy positions — and don’t be surprised if Democrats start aiming some attacks in his direction as well.
[credit provider=”Tax Policy centre”]