Competitive Tax Plan

The Competitive Tax Plan is an approach to taxation, suggested in the United States, that would impose a 10–15% value added tax (VAT) and reduce personal and corporate income taxes.[1] The plan was created by Michael J. Graetz, a tax law professor at Columbia Law School[2] and a former Deputy Assistant Secretary of the Treasury for Tax Policy.[3] Graetz states that the plan would generate enough revenue to exclude families earning less than $100,000 of annual income from having to pay income taxes or file tax returns.[4] The Competitive Tax Plan would provide a new payroll tax offset to replace the Earned Income Tax Credit, protecting low and moderate income workers from any tax increase under the new system. Under the initial proposal, households with an annual income of more than $100,000 would be taxed at a flat 25% rate and the corporate income tax rate would be reduced to 25%. Graetz argues that reducing the corporate tax rate "would make the United States an extremely attractive nation for corporate investments for both U.S. citizens and foreign investors."[4] In 2013, Graetz presented an updated version of his plan for 2015.[5]

  1. ^ Greenstein, Robert, & Lav, Irirs (2005, June 27). The Graetz Tax Reform Plan and the Treatment of Low-Income Households. Retrieved from
  2. ^ Michael J. Graetz. (n.d.). Retrieved November 2, 2020 from
  3. ^ Michael Graetz. (n.d.) Retrieved from
  4. ^ a b "Yale Law School Professor Michael Graetz Proposes Reform, Repeal of Income Tax". Yale Law School. 2002-11-08. Archived from the original on 2008-08-29. Retrieved 2007-08-08.
  5. ^ Graetz, Michael. "The Graetz Competitive Tax Plan: Update for 2015". Tax Policy Center. Retrieved 6 April 2016.

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