Once these details are resolved, the Lee-Rubio plan would simplify the tax code and pave the way to a flatter income tax.
Dallas, TX (PRWEB) September 23, 2015
The Lee-Rubio tax proposal could significantly help or hinder low-income workers, depending on the resolution of a few missing details, according to a new report by National Center for Policy Analysis Research Associate Tyler Prochazka.
“The Lee-Rubio tax plan is short on details that make a significant difference, particularly for those who are between poverty and the middle class,” says Prochazka. “Overall, most low-income taxpayers are likely to be better off under the Lee-Rubio tax proposal if existing tax credits that are not part of the proposal, such as the Earned Income Tax Credit and the Additional Child Tax Credit, are extended by Congress.”
“Once these details are resolved, the Lee-Rubio plan would simplify the tax code and pave the way to a flatter income tax,” said NCPA Senior Fellow Pam Villarreal.
According to the senators’ white paper, the Lee-Rubio plan calls for:
-- The elimination of several exemptions, including the standard deduction, the personal exemption, and the “head-of-household” classification and replaced with a personal tax credit of $2,000 per person and a new Child Tax Credit up to $2,500.
-- Filers with lower incomes could claim more of the new child tax credit as their income increased, thereby reducing the incentives associated with work and saving under the current tax system.
"Under a plan like Lee-Rubio, if the Earned Income Tax Credit and the current Child Tax Credit do not expire in 2018, then most low-income households would be better off than under the current tax system," says Prochazka.
Does the Lee-Rubio Tax Plan Help the Poor: http://www.ncpa.org/pub/would-the-lee-rubio-tax-plan-help-lower-income-households