Former New York mayor and Republican presidential candidate Rudy Giuliani has proposed an overhaul of the US tax system which would reduce CGT and corporate tax rates and allow Americans to file a one-page return.

Under the plans, the corporate tax rate would be reduced to 25% from its current 35% and CGT to 10% from its current 15%.

The plans would effectively make president George Bush's periodic tax cuts, which are set to expire in 2010, permanent.

'It would be the biggest tax cut in history,' Giuliani told Bloomberg TV.

Giuliani said he would explain how he would pay for the cuts in coming weeks but suggestions of reducing spending at federal agencies as well as staff reductions are likely to feature, Bloomberg.com reported.

'If you bring that tax down responsibly, you're going to make money on it because you're going to pick up more businesses,' he said.

He added that he would also index capital gains for inflation, which would further reduce CGT and he also proposed to index the alternative minimum tax for inflation to limit its reach. The tax, created in 1969, prevents tax avoidance of wealthy Americans.

Further reading:

Giuliani touts cuts in taxes, spending

Giuliani talks taxes: sweeping cuts and a single-page federal return