The economic plan proposed by Republican presidential candidate Newt Gingrich would add $1.3 trillion to the U.S. budget deficit in 2015 alone, according to an analysis by the nonpartisan Tax Policy Center.
The figures compare the federal government’s take under Gingrich’s proposal with projected U.S. revenue if current tax law ran its course and existing income tax cuts expired.
The analysis, released today in Washington, finds that Gingrich’s plan would cut taxes for 70 percent of households and cut tax rates for the highest earners compared with what they pay now.
“It blows a huge hole in the deficit,” said Roberton Williams, a senior fellow at the center.
Gingrich’s plan would create an optional 15 percent flat tax with a per-person deduction of $12,000. He would drop the corporate tax rate to 12.5 percent from 35 percent, allow businesses to write off capital expenses and eliminate taxes on capital gains and estates, according to his website.
People earning more than $1 million a year would receive an average tax cut of $613,689 in 2015, compared with what they pay now. That change would boost their after-tax income by 28.7 percent and put their average tax rate at 11.9 percent.
Gingrich’s plan would cut taxes for people in all income groups and raise them for no one. For households earning between $50,000 and $75,000 a year, 91.3 percent would receive tax cuts averaging $1,847, boosting their after-tax income by 3.1 percent.
Gingrich, the former speaker of the U.S. House of Representatives, is leading the 2012 Republican presidential field in some national polls.
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