Part of the deficit-reduction proposal put forward by the “Gang of Six,” a bipartisan group of senators comprised of three Democrats and three Republicans, is reforming the tax code. The reforms would reduce the number of tax brackets from six to three. However, experts are divided as to whether these reforms will lower taxes or raise them.
“We need to reduce the deficit of the United States by $4 trillion or more in the next 10 years. Everybody agrees on that. The only way to achieve it… is to put everything on the table. Is it risky politically? Of course it is,” Senator Dick Durbin (D-Ill.), a member of the Gang of Six, said in a statement to the press on Monday. “For Republicans, it means accepting that we need more revenue, and we do… If we are asking sacrifices of individuals and families across this country, certainly those who are the most comfortable, the most well-off, should be willing to pay their part.”
A CNNMoney article discusses the tax impact of the Gang of Six proposal, saying that some experts are concerned it would raise taxes for the lowest tax bracket — the very individuals Democrats have expressed concern about in their protests against entitlement reform.
“(F)or some tax filers rates could be a little higher… or not. For instance, with a proposed range of 8% to 12% for those in the lowest bracket, it’s not clear whether the final rate chosen would be above or below the 10% rate in effect today,” the article read.
According to the article, proposal does not include specific tax rates for the new brackets, only ranges: “between 8% and 12% for the lowest bracket; 14% and 22% for the middle bracket; and 23% and 29% for the top bracket.”