Study: Gingrich tax plan would worsen deficit

Study: Gingrich tax plan would worsen deficit

Republican presidential candidates, former Utah Gov. Jon Huntsman, left, and former House Speaker Newt Gingrich, shake hands before participating in a one-on-one debate in Manchester, N.H., Monday, Dec. 12, 2011.

WASHINGTON (AP) -- A new independent study says the tax plan by GOP presidential hopeful Newt Gingrich would provide big tax breaks to the rich and blow a huge hole in the federal budget deficit.

The analysis by the Tax Policy Center says households making more than $1 million a year would see their taxes drop by an average of 62 percent. The study says federal tax revenues would drop by an estimated $850 billion in 2015 and worsen the budget deficit unless it is offset by unprecedented spending cuts.

Under Gingrich's plan, taxpayers could stay in the current system or switch to a 15 percent flat tax on income. Gingrich also wants to eliminate taxes on capital gains, dividends and interest.