Thursday, April 28, 2005
Sheryl Stratton has an interesting news report, Tax Lawyers Critique Graetz Reform Plan at Judicial Conference, also available on the Tax Analysts web site as Doc 2005-8747, 2005 TNT 80-5:
Tax lawyers gathered at the U.S. Tax Court's judicial conference April 21 and 22 in Farmington, Pa., to, among other things, listen to a panel of tax policy professionals debate the merits of a simplification proposal of one of their own....
The four pieces of Graetz's proposal for a "fair and balanced tax system for the 21st century" would:
- repeal the regular individual income tax, index the alternative minimum tax, increase the AMT exemption for married couples to $100,000, and lower the AMT rate to 25%;
- reduce the corporate income tax rate to 25% and more closely align book and tax accounting;
- impose a value added tax at a 10%-14% rate to replace revenue that would be lost; and
- replace the earned income tax credit with a refundable payroll tax offset....
Purporting to represent the Treasury Department, Ronald Pearlman, a professor at Georgetown University Law Center, wondered what the plan would do to the tax base....
Stanford Law School Prof. Joseph Bankman observed that retirees' purchasing power would go down under the plan.