Civil Law

According to the Center on Budget and Policy Priorities a tax reform plan designed by Yale Law School professor Michael Graetz would replace much of the income tax with a Value Added Tax. The plan would essentially repeal the regular income tax, retain the Alternative Minimum Tax, and establish a $100,000 exemption from the AMT for married filers so that no couples with incomes under $100,000 would owe any income tax. (The exemption would be set at $50,000 for single filers.) In place of the lost personal and corporate income tax revenue, a broad-based Value Added Tax would be established, with a rate set somewhere between 10 percent and 14 percent. Whatever its other pluses and minuses, the plan could pose significant problems for low- and moderate-income households.