Tax Commission Glance
Wednesday May 11, 7:17 pm ET
By The Associated Press
Highlights of the alternate tax systems presented Wednesday to the President's Advisory Panel on Federal Tax Reform:
Value-Added Tax: A consumption tax imposed on goods at each stage of production, levied on the value added to the product at each stage and passed along to the consumer who buys the product. Could be combined with a simplified or reduced income tax.
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Consumed Income Tax: Alters the current income tax system to reduce taxes on savings and encourage investment. Revisions could include immediate write-offs for business investments, unlimited tax-free savings accounts for individuals or elimination of the corporate income tax or estate tax.
Retail Sales Tax: Replaces all other taxes, including income, payroll and estate taxes, with a national sales tax on the purchase of goods and services. Could include a business tax on the gross receipts from sale of goods and services.
Flat Tax: Replace current graduated income taxes, along with deductions and credits, with two income tax brackets. Eliminates taxes on investment income.
Reform Current Laws: Vastly simplify the current income tax system. Some plans would restructure the tax breaks for home ownership, retirement, education and other family goals, while leaving its progressive income tax rates in place. Others would eliminate most deductions and credits while lowering and flattening income tax rates.
Other ideas:
--Eliminating the income tax system and replacing it with fees on all retail and wholesale transactions, including financial transactions.
--Imposing an annual tax on the increased value of assets held by wealthiest families and corporations, directing the money raised toward eliminating the alternative minimum tax and expanding savings incentives for retirement.
--Promoting individuals' capital ownership with credits and savings accounts and eliminate the estate tax.
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