Reinventing the Wheel: What We Can Learn from the Tax Reform Act of 1986

23 Pages Posted: 14 Oct 2014 Last revised: 30 Oct 2014

Date Written: October 29, 2014


This paper has suggested that as we consider tax reform in 2014 and thereafter, we should revert to some of the positive features of TRA 86, updated to reflect increasing globalization. Specifically:

a. The top individual rate, the KG rate and the dividend rate should be set at 28%; b. The corporate rate should also be set at 28%; c. Corporations should be taxed on global income with no deferral or exemption.

These reforms are not enough to address our long-term deficit problem; they are designed to be revenue neutral overall, like in TRA 86. In the longer term we need a VAT, but that is a task that must wait for bolder political leadership than we currently appear to have.

Keywords: Tax Reform

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S., Reinventing the Wheel: What We Can Learn from the Tax Reform Act of 1986 (October 29, 2014). U of Michigan Public Law Research Paper No. 424, U of Michigan Law & Econ Research Paper No. 14-018, Available at SSRN: or

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

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