http://politicalcalculations.blogspot.com:80/2008/01/fred-thompsons-simpler-tax-plan-aka.html
Sometimes, the projects we take on come about in the weirdest ways. After we reviewed the tool that highlights Rudy Giuliani’s simpler income tax proposal, we received an e-mail from an avid Fred Thompson supporter asking if we were ever going to review Fred’s even simpler income tax proposal.
Since our expertise revolves around creating web-based tools, we replied that unless Fred had a tool to go along with his proposal, we wouldn’t be reviewing it. But, as it turns out, there was a tool, in the form of an Excel spreadsheet (more details here.) But no actual made-for-the-web version which, in this day and age, just won’t fly.
So we offered to take it on as a project, which happens to turn out to be pretty timely as the Wall Street Journal really likes Fred’s plan. A lot. So here we go!
Key Features of Fred Thompson’s Simpler Income Tax Proposal
What Fred Thompson has proposed is a new, simpler option that taxpayers can use when filing and paying their income taxes. Taxpayers would have a choice of filing their taxes under the plan outlined below or filing their taxes using one of the familiar income tax return forms that already exist under the current tax code.Standard Deduction
Fred Thompson’s proposed tax reform includes sizable increases in the standard deduction available to both single and joint tax filers, which reduces the amount of income that will be subject to income taxes. Single income tax filers can reduce their taxable income by $12,500, while those filing joint income tax returns can reduct their taxable income by $25,000.Personal Exemptions
Beyond the standard deductions outlined above, Fred Thompson’s tax reform plan includes a $3,500 personal exemption for each individual covered by the filer’s tax return, increasing the amount of income that will not be subject to income taxes. For example, a family of three people would be able to reduce the amount of their taxable income by $10,500 (3 X $3,500).Tax Rates
The tax rates that would apply to taxable income under Fred Thompson’s simpler tax proposal, as well as the portion of taxable income to which they apply, are presented in the table below:…