Michael J. Graetz
- Published in print:
- 2008
- Published Online:
- October 2013
- ISBN:
- 9780300122749
- eISBN:
- 9780300150193
- Item type:
- chapter
- Publisher:
- Yale University Press
- DOI:
- 10.12987/yale/9780300122749.003.0012
- Subject:
- Economics and Finance, Economic Systems
This chapter presents the layout of the Competitive Tax Plan. It argues for the elimination of the present broken method of revenue collection and for replacing the lost revenue with a broad-based ...
More
This chapter presents the layout of the Competitive Tax Plan. It argues for the elimination of the present broken method of revenue collection and for replacing the lost revenue with a broad-based tax on consumption, which would return the income tax to its pre-World War II status—a low-rate tax on a relatively thin slice of higher-income Americans. The chapter argues that a value-added tax imposed at a rate of 10 to 14 percent could finance a $100,000 family exemption from income tax, eliminating 150 million Americans from the income tax rolls and allowing a simpler income tax at a 20 to 25 percent rate to be applied to incomes over $100,000. It explains that these two taxes, in combination, would produce revenues roughly equivalent to the current income tax.Less
This chapter presents the layout of the Competitive Tax Plan. It argues for the elimination of the present broken method of revenue collection and for replacing the lost revenue with a broad-based tax on consumption, which would return the income tax to its pre-World War II status—a low-rate tax on a relatively thin slice of higher-income Americans. The chapter argues that a value-added tax imposed at a rate of 10 to 14 percent could finance a $100,000 family exemption from income tax, eliminating 150 million Americans from the income tax rolls and allowing a simpler income tax at a 20 to 25 percent rate to be applied to incomes over $100,000. It explains that these two taxes, in combination, would produce revenues roughly equivalent to the current income tax.
