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.