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In Testimony, Debt Reduction Task Force Member Leonard Burman Cites BPC Report

In testimony before the Senate Committee on Finance yesterday, Debt Reduction Task Force member Leonard Burman invoked the Task Force’s “Restoring America’s Future” report in discussing tax reform options:

On loopholes:

“The biggest loophole is the lower tax rate on capital gains. Several bipartisan tax reform plans, including the Bipartisan Policy Center plan that I contributed to, would tax capital gains at the same rate as other income. Combined with a substantial reduction in tax expenditures, this allows for a cut in top income rates while maintaining the progressivity of the tax system. That was also the approach taken by Ronald Reagan in 1986.”

On capital gains:

“Equating the tax rate on capital gains with the tax rate on other income would allow a high degree of progressivity with lower top income tax rates. Indeed, that was what made the 28 percent tax rate on top income possible in the Tax Reform Act of 1986. The Simpson-Bowles and Bipartisan Policy Center’s deficit reduction plans both paired full taxation of capital gains with a substantial cut in top income tax rates, while maintaining progressivity.”

2011-09-15 00:00:00

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