This week, Dr. Ben Carson released details of a tax reform plan. This plan would replace the current federal income tax (both individual and corporate) with a 14.9 percent Hall-Rabushka-style flat tax. The plan would tax all wage income and business income at 14.9 percent. Capital gains, dividends, and interest income would be tax-exempt at the individual level. Businesses would be allowed to fully expense capital investment, but would no longer be able to deduct interest expenses. The plan would also eliminate all itemized deductions and all tax credits except for the foreign tax credit. The plan would further expand the tax base by including fringe benefits, such as employer-provided health insurance, in the tax base.

Our analysis finds that the plan would reduce federal revenues by $5.6 trillion over the next decade. However, it also would improve incentives to work and invest, which would increase gross domestic product (GDP) by 16 percent over the long term if the tax cuts were appropriately financed. This increase in GDP would translate into 10.9 percent higher wages and 5.2 million new full-time equivalent jobs. After accounting for increased incomes due to these factors, the plan would reduce tax revenues by $2.5 trillion.

Read the full article at the Tax Foundation: Details and Analysis of Dr. Ben Carson’s Tax Plan