(Reuters) - Republican presidential candidate Mitt Romney offered some details on Wednesday to his plans to overhaul the U.S. tax system. Highlights include:
Individual tax rates would drop by 20 percent. The top rate would be reduced to 28 percent from 35 percent and the lowest to 8 percent from 10 percent. He had previously proposed permanently extending the 2001 and 2003 Bush-era tax cuts. Although Romney’s new plan did not mention individual tax breaks, previously he has favored allowing each of these three measures to expire: the American Opportunity tax credit for higher education, the expanded refundability of the child credit, and the expanded earned income tax credit. All three provisions are scheduled to expire at the end of 2012. The Alternative Minimum Tax for individuals would also be scrapped.
Romney renewed his call for eliminating taxes on capital gains, interest and qualified dividends for families with annual incomes below $200,000. His plan also calls for the current 15 percent tax on investment income to remain for upper-income earners. The estate tax, a popular target for Republican candidates, would be eliminated under Romney’s plan.
Romney repeated his call to lower the top corporate tax rate to 25 percent from 35 percent. He also renewed a call to make permanent the research and development tax credit. The tax plan again would switch to a territorial system, letting U.S. corporations pay little or no U.S. tax on foreign profits. Romney would repeal the corporate Alternative Minimum Tax.
Reporting by Patrick Temple-West; Editing by Eric Walsh