(CNN) -- Those are a few of the highlights of a new tax reform proposal put out Wednesday by Michigan Republican Dave Camp, the outgoing chairman of the House Ways and Means Committee.
Here's the thing though: Nobody expects tax reform to happen this year, with mid-term elections in November.
But Camp's proposal will serve as the first Republican marker for tax reform whenever lawmakers do get around to it, which may not happen until 2017, political observers say.
Like any broad tax reform plan, Camp's contains much for members of both parties to embrace or much to oppose.
Shortly after its unveiling, Congresswoman Lynn Jenkins (R-02) released the following statement:
Fixing our broken tax code is a foundational step to building a healthy economy and creating more jobs and more take home pay for hardworking Americans. Kansans deserve a simpler, fairer, and flatter tax code. Chairman Camp’s draft is a step forward and an opportunity to get input through an open and transparent process. Our tax code is complex and this is about getting feedback and having a real discussion about what tax reform can mean for families and job creators, not hiding behind closed doors and waiting to pass it before we know what is in it. The public discussion begins today.
House Speaker John Boehner called the plan "the beginning of [a] conversation" lawmakers need to have about tax reform.
Here are a few key features of Camp's plan from an initial reading of it:
Lower rates: Currently there are seven individual income tax rates ranging from 10% to 39.6%. Camp would reduce them to three: 10%, 25% and 35%. The last bracket would essentially apply to the income that today is subject to the 39.6% bracket -- income over $400,000 for singles and $450,000 for married couples filing jointly.
But many tax breaks, such as the one workers get for employer contributions to their health coverage, would only be allowed against income up to the 25% bracket. So their total value would be reduced or even eliminated for very high-income filers.
In addition, because of a complex formula that doesn't scream tax simplification, the rich would lose at least some of the benefit of having their first dollars taxed at 10%.
In previews of Camp's plan, it was said the proposal would have just two income tax brackets -- 10% and 25% -- with a 10% surtax added for the highest income filers.
Higher standard deduction: The proposal would raise the standard deduction to $11,000 for individuals and $22,000 for couples. The net result would be fewer taxpayers who itemize their deductions, thereby simplifying the tax filing experience.
As a result, the vast majority of filers would only have to file a basic IRS 1040A form, according to Camp.
But the standard deduction is one of those deductions that would start to phase out for high-income filers.
Increased child tax credit: The per-child tax credit would be increased to $1,500 from $1,000 and would be allowed for kids up to the age of 18, versus 17 today. But again the credit would phase out for very high income filers.
Reduced mortgage interest deduction: The mortgage interest deduction currently is allowed on mortgages up to $1 million. Under Camp's proposal the cap would be lowered to $500,000.
No more state and local income tax deduction: Taxpayers are allowed under today's tax code to deduct their state and local income taxes on their federal return. That would no longer be allowed under the new proposal.
New bank tax: "Too big to fail" financial institutions would pay a quarterly tax of 0.035% on assets in excess of $500 billion, raising more than $86 billion over 10 years.
New tax rate on investment managers: Managers of private equity, including venture capital, funds are often paid "carried interest" as part of their total pay. Carried interest represents a share of profits from investment funds.
But the managers currently only have to pay the capital gains tax rate on it, which is lower than the ordinary income tax rate.
Under Camp's plan, at least some types of carried interest would be taxed as wage income.
"I think we do need to reform the law with regard to carried interest ... particularly when the activity is more like wage income," Camp said Wednesday.
--CNN's Lisa Desjardins and Paul Courson contributed to this report
Posted by: Nick Viviani