A new tax reform proposal has surfaced that would impose a 15% tax on retirement accounts.
More specifically, the proposal includes a new 15% tax on interest paid to tax-exempt institutions and retirement plans.
The corporate tax reform plan, by Alan Viard of the American Enterprise Institute and Eric Toder of the Urban Institute, calls for a cut in the top corporate rate from 35% to 15%. To offset this drop in corporate rates (keeping the proposal revenue-neutral), the proposal also includes (among other things) a new 15% tax on interest earned by retirement plans “to limit the net tax benefit these taxpayers receive from a lower corporate tax rate,” according to the proposal’s authors. They claim that this would raise $48 billion in 2018 and $60 billion in 2025.
Will this proposal gain any traction? It’s hard to say, but it’s already drawn the attention (and support) of the Washington Post’s editorial board.
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