WASHINGTON (AP) — Republican presidential hopeful Fred Thompson proposed an income tax plan Sunday that would allow Americans to choose a simplified system with only two rates: 10 percent and 25 percent.

Thompson's proposal, announced on ''Fox News Sunday,'' would allow filers to remain under the current, complex tax code or use the flat tax rates.

Asked whether the plan would cut too deeply into federal revenues, the former Tennessee senator and actor said experts ''always overestimate the losses to the government'' when taxes are cut.

''We've known for years any time we have lowered taxes and any time we've lowered tax rates, we've seen growth in the economy,'' Thompson said.

Thompson added that money would be saved by his Social Security reform plan. He proposed that workers younger than 58 receive smaller monthly Social Security checks than they are now promised. Individuals could contribute 2 percent of their paycheck to a personal retirement account, an amount that would be matched by the Social Security trust fund.

The retirement plan ''faces up to the fact that Social Security is going bankrupt and we're going to have to do something about it,'' he said.

Thompson proposed permanently extending tax cuts enacted in 2001 and 2003, reductions that would end after Dec. 31, 2010 unless Congress acts. Republicans Rudy Giuliani, Mitt Romney and John McCain said they also would extend President Bush's tax cuts. The Congressional Budget office has estimated it would cost the government $2.3 trillion from 2008 through 2017 if the expiring cuts were extended.

Romney said he would eliminate taxes on interest and dividends for families earning less than $200,000 annually.

Key aspects of Thompson's tax proposal:

—The choice of filing under the current system or a flat tax rate of 10 percent for joint filers with an income of up to $100,000 — $50,000 for single taxpayers; and 25 percent on income above these amounts.