Study: Gingrich tax plan would provide big breaks for rich, blow huge hole in budget deficit

By Associated Press,
Published: December 12

WASHINGTON — The tax plan by GOP presidential hopeful Newt Gingrich would provide big tax breaks to the rich and blow a huge hole in the federal budget deficit, according to an independent study released Monday.

The analysis by the Tax Policy Center says households making more than $1 million a year would see their taxes drop by an average of 62 percent. Overall, federal tax revenues would drop by an estimated $850 billion in 2015, a figure that would dramatically worsen the budget deficit unless it is offset by unprecedented spending cuts, the study said.

“The revenue losses are enormous,” said Roberton Williams, a senior fellow at the Tax Policy Center.

Gingrich proposes an optional 15 percent flat tax on income. Under the plan, taxpayers could stay in the current system, which has a top tax rate of 35 percent on taxable income above $379,150, or switch to the new 15 percent tax. The new tax would apply to income at all levels, but there would be a variety of tax deductions and credits.

(More here.)