The top income tax rate would drop from 39.6 percent to 25 percent, but the plan would impose a new 10 percent surtax on income above $400,000 for individuals and $450,000 for married couples. The top corporate income tax rate would fall from 35 percent to 25 percent.
The plan would increase the standard deduction from $12,400 to $22,000 for married couples, essentially exempting families that make less from paying federal income taxes. The child tax credit would be increased from $1,000 to $1,500.
The plan is designed to encourage more taxpayers to take the simpler standard deduction rather than itemizing. As a result, 95 percent of filers would take the standard deduction rather than itemize, according to analysis by the nonpartisan Joint Committee on Taxation. Currently, about one-third of filers itemize their deductions.
Investment income currently has a top tax rate of 20 percent. Under Camp's plan, capital gains and qualified dividends would be taxed like regular income, but investors could exempt 40 percent of their earnings.
That would result in a 15 percent tax rate for many investors. The superrich would have a top tax rate of 21 percent on their investments.
The plan is designed to raise about the same amount of tax revenue as the current system, though the overhauled system would be much simpler. It also is designed so that different income groups continue to pay about the same as they do today. Individual taxpayers, however, could see big changes, depending on their circumstances.
Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap