The Romney-Ryan tax plan gets a jumpstart on fundamental tax reform. To do this, the plan would lower all marginal income tax rates by 20 percent. To pay for this rate reduction, the Romney-Ryan tax plan would broaden the income tax base, but only for high earners.
Below is how three typical middle-income households will fare under the Romney-Ryan tax plan (each household is assumed to use the standard deduction and personal exemptions/child tax credit):
Family of Four earning the median income:
Adjusted gross income: $70,000
Federal income tax under present rules: $3,581
Federal income tax under Romney-Ryan: $2,465
Annual Tax Savings $1,116
Single parent with two dependent children:
Adjusted gross income: $50,000
Federal income tax under present rules: $1,874
Federal income tax under Romney-Ryan: $1,099
Annual Tax Savings $775
Single taxpayer:
Adjusted gross income: $30,000
Federal income tax under present rules: $2,609
Federal income tax under Romney-Ryan: $2,087
Annual Tax Savings $522