How to Raise $1 Trillion Without a VAT or a Rate Hike
8 Pages Posted: 10 Jul 2010
Date Written: July 5, 2010
Abstract
There is an impending crisis in which revenue is needed to contain the federal deficit, now projected at $1.3 trillion a year. Some have said that individual income tax rates will need to go up to 85 percent, and some have advocated a federal VAT, FAIR tax, or sales tax, with rates as high as 61 percent. This article shows the best way to raise $1 trillion without either a VAT or a rate increase, mostly by requiring that our tax accounting better reflect economic income. Doing so will make the tax system both fairer and more efficient. Table 1 lists ways to raise $1 trillion. The list, however, cannot be adopted without a crisis.
This article is part of the Shelf Project, a collaboration among tax professionals to develop and perfect proposals to raise revenue.
Keywords: Tax Reform, Revenue Enhancement, Tax Accounting
JEL Classification: H20, H21, K34
Suggested Citation: Suggested Citation