As the Republican primary season is in earnest, we've been asked a few times about the difference between the current tax code and the tax proposals by the two current front runners, Newt Gingrich and Mitt Romney. The following table gives the key highlights between the two proposals and the current tax code. More detailed information about the proposals can be found at the Tax Policy Center.
| Tax Issue | Current Legislation | Gingrich | Romney |
| Bush Tax Cuts | Expires 2013 | Extend | Maintain current rates |
| Tax Rates and Brackets | Give a choice of current system or a flat 15% | Lower rates in the future | |
| Capital Gains, Dividends, and Interest | 15% to ordinary income, depending on nature. | Exempt | Exempt for households with AGI less than $200,000. |
| Exemptions, Deductions, and Credits | $3,700 exemption per person Child tax credit, mortgage interest, charity
Health insurance a pre-tax benefit
|
Allow $12,000 exemption per person Retain child credit, EITC,
and deductions for mortgage interest and charitable contributions Allow tax credit or deduction for health insurance purchased
|
No short term changes Long run – flatten tax base
|
| AMT | Every year this is typically patched for incomes within a certain AGI. | Repeal if opt into flat tax, otherwise AMT remains | |
| Refundable Credits | No expiration | Retain earned income credit and child tax credit. | Retain |
| Payroll Tax | Percentage of income goes to government in exchange for a guaranteed future benefit. | Migrate to a self-funded model. | Temporary reduction if properly structured. |
| Taxes under Affordable Care Act of 2010 | Miscellaneous taxes associated with the individual mandate for health care. | Repeal | Repeal |
| Estate Tax | Set to roll back in 2013 to pre Bush era levels. | Repeal | Repeal |
