Bipartisan tax plan could create millions of jobs, report says

A bipartisan Congresional plan would provide more revenue and add millions of jobs, according to a preliminary estimates produced by The Heritage Foundation, a conservative think tank. 

The proposal would boost the economy by nearly $160 billion and create 2 million jobs this year and more than 3 million by 2013, Sen. Judd Gregg (R-N.H.), an architect of the plan, touted in an op-ed in the Union-Tribune, a home state newspaper.

Gregg, who has teamed up with Democratic Sen. Ron Wyden (Ore.), said the plan would increase government revenues without raising taxes, while simplifying the tax code. 

"Simply put, our tax laws are out of date, unfair and overly burdensome for the American taxpayer," Gregg wrote in the op-ed. "This legislation represents a timely solution to a problem we can no longer afford to ignore. We must address the flaws in our current system."

The Wyden-Gregg proposal cuts the number of tax brackets in half and creates three brackets with rates of 15, 25 and 35 percent. It eliminates the alternative minimum tax, triples the standard deduction, create new opportunities for tax-free saving and eliminates restrictions on personal exemptions and itemized deductions. 

The proposal also would cut the corporate tax rate from 35 percent to 24 percent and replace the six existing corporate rates with eight different brackets. 

Meanwhile, it eliminates many of the special interest tax breaks. 

Under the plan, seniors would pay taxes on only 65 percent of their dividend and long-term capital gains income, reducing their tax rate. 

The plan aims to let taxpayers use a one-page federal income tax form and would allow the Internal Revenue Service to prepare the tax return then let the taxpayer edit and sign it, saving an estimated $194 billion on tax preparation each year.