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NEW YORK (

TheStreet

) -- Newt Gingrich's tax plan could cut federal yearly revenues by as much as $1.28 trillion or 35% and cut the corporate income tax rate to 12.5% from its current 35% level,

according to a study.

The Tax Policy Center investigation looked at two avenues Gingrich's plan could take, as the study said that the former House speaker hadn't clarified if his tax plan would allow taxpayers to switch between the current tax system and his suggested alternative 15% "flat tax," or if everyone would move to the flat tax system.

Newt Gingrich

"At the corporate level, the Gingrich plan would ... allow full expensing of capital expenditures," the report said. "The plan would not broaden the tax base by eliminating existing tax expenditures or reducing the tax deductibility of interest payments."

Under the current tax structure, the study said Gingrich's tax plan would reduce federal revenues by $850 billion in the 2015 calendar year. Under a flat tax system, the study found that revenues would fall $1.25 trillion by 2015. The scenario in which the federal government would lose $1.28 trillion in revenue was an estimate on a static basis.

The study said no one would face a tax increase from the Gingrich plan if they filed tax returns under current policy, so long as the 2001-2010 tax cuts (except for the one-year payroll tax cut) were permanent.

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The 15% flat tax option would allow taxpayers to claim a $12,000 exemption for each individual and dependent under Gingrich's plan and it would repeal the alternative minimum tax.

-- Written by Joe Deaux in New York.

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