This week, Governor Bobby Jindal released details of a tax reform plan. This plan would reduce individual income tax rates, lowering the top rate from 39.6 percent to 25 percent while eliminating both the standard deduction and personal exemption. The plan would also eliminate the corporate income tax. In addition, the plan would eliminate the estate tax and the Alternative Minimum Tax.

Our analysis finds that the plan would reduce federal revenues by $11.3 trillion over the next decade. However, it also would improve incentives to work and invest, which could increase gross domestic product (GDP) by 14.4 percent over the long term. This increase in GDP would translate into 8.7 percent higher wages and 5.8 million new full-time equivalent jobs. After accounting for increased incomes due to these factors, the plan would reduce tax revenues by $9 trillion.

Details of the Plan
Individual Income Tax Changes

• Consolidates the current seven tax brackets into three, with a top marginal income tax rate of 25 percent (Table 1).
• Eliminates the personal exemption and standard deduction.
• Eliminates the head of household filing.
• Taxes long-term capital gains and qualified dividends at ordinary income tax rates.

Read the full article at the Tax Foundation: Details and Analysis of Governor Bobby Jindal’s Tax Plan