“Senator Gregg and I are demonstrating that there is room for Democrats and Republicans to agree on tax reform,” said Wyden, an Oregon Democrat. “By simplifying the tax code and scaling back tax breaks for special interests, we can give everyone an opportunity to get ahead. Businesses of all sizes will be in a better position to compete and grow jobs. Working families will keep more of their hard earned dollars and everyone will spend a lot less time filling out tax forms.”

"For far too long, our tax system has been overly complicated, burdensome and unfair to taxpayers and to small businesses that are the economic engines of our nation," added Gregg, a New Hampshire Republican. "This investment-oriented proposal will bring us back to common-sense tax laws that encourage people to create jobs and make our nation more competitive."

A key element to the proposal is a flat 24% corporate tax rate, which would bring the US corporate tax rate, currently the second-highest among the major industrialized nations, below the rates levied in key competitors in the European Union, Canada, Australia and elsewhere.

The Senators say that their bill is set out along similar lines to the bipartisan Tax Reform Act of 1986, which funded tax relief by eliminating a number of special interest tax breaks.

For individuals, the bill would:

• Eliminate the Alternative Minimum Tax;
• Reduce the number of individual tax brackets from the current six to three: 15%, 25%, and 35%;
• Increase the standard tax deduction almost three-fold, reducing individual tax bills and reducing record-keeping obligations;
• Enable a simple one-page 1040 tax return form with the option that taxpayers can request that the IRS prepare a tax return for them to review and sign.

For business, the bill would:

• Allow more than 95% of small businesses – those with gross annual receipts of up to USD1m – to permanently expense all equipment and inventory costs in a single year;
• Reduce the top corporate tax rate and replace the existing six corporate rates and eight brackets with a single flat rate of 24%;
• Eliminate a number of specialized tax breaks that favor one business sector or group of individuals over another, thus making the tax code simpler and fairer;
• Retain preferential treatment for capital gains in order to encourage investment, by creating a new 35% exclusion and a progressive rate structure for dividend and long-term capital gains income. The bill would also cut the holding period to six months from one year for the first USD500,000 of a taxpayer’s capital gains income;
• Repeal the rule that allows US companies to defer taxes on their foreign income;
• Create a more even playing field between corporate debt and equity by cutting the value of inflation from a corporation’s interest deduction on debt.

"This proposal echoes the successful tax reform championed by President Reagan and Senator Bill Bradley during the mid-1980s, Gregg continued. "And it is time that we return to this sort of common-sense, bipartisan approach.”