Some More Camp Plan Details
One, here are the rate changes. It's kind of odd -- loosely speaking, the people in the 10 percent and 25 percent brackets won't see a rate change, while everyone else will get a cut:
Two, the plan increases the standard deduction so that 95 percent of taxpayers no longer have to itemize. That simplifies things, but it also neuters the incentives created by tax deductions, which can be good or bad.
The case of charity is especially interesting. The blueprint notes that people who donate to charity "will no longer need to keep all the receipts and fill out all the forms" -- but that's because they get the same deduction whether they donate to charity or not. Even for taxpayers who itemize, the plan would limit the charitable deduction to contributions exceeding 2 percent of their total income. (The example they use: If you earn $100,000 and donate $10,000, you can deduct $8,000.) The blueprint claims that the plan would still increase charity, because it would improve the economy and the economy in turn is linked to charitable donations.
Three, the plan keeps the mortgage deduction for the most part. Current mortgages will be unaffected, but in the coming years the cap will be reduced from $1 million to $500,000. Not a bad move, but critics of the deduction wanted to see a lot more.
And four, at a time when even a lot of conservatives support expanding the Earned Income Tax Credit -- which today is fully refundable -- this plan would pare it back, making it, in the blueprint's words, "a credit against actual payroll taxes paid, strengthening the program's integrity and better guarding against mismanagement."
There's lots more, of course: repealing the Alternative Minimum Tax, cutting the corporate rate, condensing the various education deductions, eliminating the "double tax that only applies to the over-seas earnings of U.S. companies if those companies want to reinvest those earnings in the United States" ...
Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen