The platform includes planks on healthcare, national security, regulatory reform and reducing poverty.
“With this plan, everyone in our country—the anxious and the eager, the Old America and the New America—can unite and build a confident America,” Ryan said of the House GOP agenda Friday morning.
The tax plan would slash rates across the board — by 20 percent for businesses and 33 percent for individuals, simplify the tax filing process and restructure the international tax code.
The plan embraces long-standing Republican principles like cutting rates and eliminating deductions while embracing a business consumption tax that is increasingly popular in conservative think-tank circles.
Though the GOP proposal leaves out details — such as which specific deductions would be eliminated and how much the plan would cost — it offers a fuller alternative to the deep rate cuts pitched by presumptive Republican presidential nominee Donald Trump.
“The blueprint is the beginning of our conversation with the American people, and we look forward to hearing their ideas,” said House Ways and Means Committee Chairman Kevin Brady (R-Tex.). “This is not our tax code — this is the American people’s tax code, and we need their input.”
Ryan, the former chairman of the House Ways and Means Committee, vowed to continue vetting options for overhauling the tax code when he became speaker last year.
The proposal shares some themes with ideas released by Trump, but the presumptive GOP nominee has proposed much steeper rate reductions. Trump has said he would cut the top individual rate to 25 percent and the top corporate rate to 15 percent while also eliminating the estate tax. He has said he would offset the cost of the tax cuts by eliminating most deductions for individuals and businesses.
That plan has been criticized by economists on both the left and the right. In December, the nonpartisan Tax Policy Center estimated that Trump’s plan could cost the federal government as much as $9.5 trillion over 10 years.
The release of the tax plan Friday caps a three-week string of agenda-related events. The propals does not include enough detail about the proposed cuts and changes to deductions to contain an official estimate from congressional scorekeepers of how it would impact the federal deficit.
The plan assumes that a GOP-led tax regime would eliminate all Obamacare taxes, which are expected to bring in around $600 billion over a decade. It also assumes that a package of expiring tax breaks and benefits would be made permanent.
Tax reform is a perennial topic for Republicans who argue that high tax rates, a complicated filing system and antiquated business rules are creating a drag on the economy.
But reform talks have stalled in recent years as negotiators get hung up over which deductions and credits to eliminate in order to make up for revenue lost from cutting rates. That’s because many of the big-ticket tax benefits — like the state and local sales-tax deductions and the research and development tax credit — also have major constituencies that lawmakers don’t want to offend.
The GOP plan avoids taking a stand on those critical issues, leaving those decisions to later negotiations.
One of the more controversial elements of the plan will be to tax small businesses at a top rate of 25 percent. Small-business groups have long argued that they should be taxed at the same rate as corporations.
Republicans chose the 25 percent rate because they believe other savings in the tax code would make up for the difference and help businesses remain competitive, according to a senior GOP aide.
Democrats generally agree that the tax system is broken, but the two sides have been deadlocked for years over how far rates should be cut and how much revenue the government should receive from income tax, among other critical issues.
The individual side of the GOP plan includes a variety of proposals:
- Cut the top individual tax rate from 39.6 to 33 percent. The plan would also streamline the number of tax brackets from seven to three — 12, 15 and 33 percent.
- Replace itemized deductions with a higher standard deduction. The plan would cut most individual tax breaks and benefits except the earned income tax credit and deductions for mortgage interest, charitable giving and education expenses. Republicans would instead increase the standard deduction to $12,000 from $6,300 for single individuals and to $18,000 for single individuals with a child. Married couples filing jointly would see their deduction increase to $24,000 from $12,600.
- Postcard-sized tax returns. The plan pledges to allow most individuals to file their taxes on a form the size of a postcard, an idea that became popular during the GOP primary debates earlier this year.
- Eliminate the alternative minimum tax and the estate tax.
- Cut tax rates on investment income. Investment income is currently taxed at a top rate of 20 percent — lower than the top rate for ordinary income. The GOP plan would further reduce that rate by allowing taxpayers to deduct 50 percent of their net capital gains, dividends and interest income. That would create a new rate structure of 6 percent, 12.5 percent and 16.5 percent.
- Increase the child tax credit. The proposal would streamline existing child credits into a single $1,500 credit and a $500 credit for non-child dependents.
On the business side the proposals include:
- Cut the top corporate tax rate to 20 percent. The top rate for corporations is currently 35 percent. Republicans argue a 20 percent top rate will make the United States more competitive with both emerging markets and competitors in countries like Japan and China.
- Allow businesses to immediately and fully write off capital investments. Republicans have long said that allowing businesses to write off major capital investments will encourage greater investment and growth.
- Shift to a “territorial” system of international taxation and border adjustments. There is strong support in the business community for the U.S. to shift to a territorial system in which companies would not be taxed on income earned overseas. Republicans argue that the current system, which taxes foreign-earned income when companies reinvest the money in the U.S., encourages companies to stockpile cash offshore. The GOP plan shifts to a territorial system that would only tax companies based on the location where goods are sold.