House Ways and Means Committee Chair Dave Camp (R-MI) has produced an impressive tax reform plan that eliminates most loopholes, deductions, and credits. But the plan also introduces a number of hidden taxes that push marginal rates—mostly for higher-income taxpayers—well above the advertised levels. For some taxpayers, the effective tax rate under Camp’s plan could be as high as 67 percent, based on my analysis of the section-by-section description of the proposal. On its face, the new tax schedule appears straightforward: three tax rates—10 percent, 25 percent, and 35 percent. The 25 percent rate starts at taxable income of $71,200 for couples ($35,600 for singles) and the 35 percent rate starts at “modified adjusted gross income” (MAGI) of $450,000 ($400,000 for singles). (MAGI is a broader definition of income than the more common AGI.) The proposal would end both the individual and corporate AMTs and the phaseouts of itemized deductions and personal exemptions (by abolishing the latter entirely). Most tax policy experts would cheer their demise. But the plan also introduces a whole raft of new phaseouts and hidden tax rates. First, the 35 percent rate is marketed as a 25 percent base rate plus a 10 percent surtax that applies to a broader base of income (MAGI). This turns out to be important. The plan resurrects the 1960s era add-on minimum tax—the granddaddy of today’s uber-complex Alternative Minimum Tax. Effectively, the surtax can be thought of as an additional tax on certain preference items such as the value of employer-sponsored health insurance, interest on municipal bonds, deductible mortgage interest, the standard deduction, itemized deductions (except charitable contributions), and untaxed Social Security benefits. Although the list of preference items differs from the old add-on minimum tax, the idea is eerily similar. Then there are the phaseouts, which all amount to hidden surtaxes. They include: Return of the TRA86 bubble tax rate. One of the least impressive provisions of the 1986 tax reform was its bubble tax rate of 33 percent on  taxpayers with moderately high incomes (higher income taxpayers paid just 28 percent). Camp would do the same thing by phasing out the benefit of the 10 percent bracket—that is, the difference between tax at the 10 percent and 25 percent rates—for higher-income taxpayers. He’d do it via a 5 percentage point surtax for MAGI between $300,000 and $513,600 for couples ($250,000 to $356,800 for singles). The result: effective tax rates as high as 40 percent (the 35 percent top rate plus the 5 percent surtax). Bubble #2. The standard deduction phaseout equals a surtax as high as 7 percent. The plan phases out the  value of the standard deduction for singles and couples at a 20 percent rate between $517,500 and $627,500 of MAGI ($358,750 to$413,750 single returns). In these ranges, $1.00 of additional income translates into $1.20 of additional taxable income, so Camp increases the 35 percent rate to a 42 percent effective rate (35 percent of 120 percent). Bubble #3. Child credit phaseout. As under present law, the child credit phases out at a 5 percent rate, but Camp would start to reduce the benefit of the credit at the end of the standard deduction phaseout. The size of the phaseout range is $30,000 per kid ($1,500 divided by 5 percent). Double trouble for heads of household. The plan eliminates head of household status, which benefits single people with children. Camp would add  a $5,500 extra standard deduction for single filers with children but then phase it out dollar for dollar between $30,000 and $35,500 of AGI. This effectively doubles these families’ tax rates from 10 percent to 20 percent over that income range (since $1 of additional income raises taxable income by $2). Giant surtax for higher-income home sellers. Today, home sellers can exclude from their taxable income up to $500,000 of capital gain on the sale of a principle residence ($250,000 for singles). Camp would phase out this exclusion dollar for dollar, starting at $500,000 of MAGI for couples ($250,000 for singles). Since 40 percent of long-term capital gains would be excluded from AGI, an additional dollar of income would increase taxable income by $1.60 ($1 of regular income plus 60 percent of $1 of capital gain that would no longer be excluded). When this provision interacts with the other phaseouts, effective rates for some high-income households would be very high: 64 percent for those in the 40 percent brackets (bubble #1 and #3), 67 percent for those in the 42 percent bracket (bubble #2), and 56 percent for those in the plain old 35 percent bracket. All those surtaxes also apply to capital gains and dividends. Camp would exclude 40 percent of long-term capital gains and qualifying dividends from taxable income, creating effective tax rates of 6 percent, 15 percent, and 21 percent for those in the 10, 25, and 35 percent brackets. But the phaseouts would  add 5 percentage points for those in bubbles #1 and #3 and 7 percentage points in bubble #2 (creating effective capital gains rates of 26 percent or 28 percent for high-income taxpayers). Finally, add the 2010 Affordable Care Act  surtaxes of 0.9 percent on compensation and 3.8 percent on investment income, which the plan would retain. Congressman Camp’s tax reform proposal includes many simplifications, like the consolidation of education tax incentives. But its effect on rates would be far from simple. Follow me on twitter.