Replace income taxes with VAT?
By Sam Waltz
The Competitive Tax Plan — known as “the Graetz Plan” for its creator, Columbia University Law Professor Michael Graetz — took center stage last week at the Wilmington Tax Group, Delaware’s largest and oldest regular meeting of tax and financial professionals.
Marc W. Everson, a former commissioner of the Internal Revenue Service (IRS) from 2003-07 under the second President George Bush, endorsed the approach that would substitute a 10-15 percent value added tax (VAT) for huge portions of personal and corporate income taxes.
Everson is a candidate for the Republican nomination for president of the United States, and he visited the Wilmington Tax Group luncheon at the University & Whist Club, where it has met for 50 years.
The Graetz Plan, or the Competitive Tax Plan, is designed to simplify the American tax system, reducing the number of citizens required to file returns by about 90 percent, by a shift to consumption taxes from income taxes for lower and moderate income taxpayers. Households with more than $100,000 income would be taxed at a flat rate of 25 percent, the same rate which would be implemented for corporate taxes. Graetz says such changes would increase the attractive for new investment in the US, by both Americans and from abroad. (More details can be found at http://en.wikipedia.org/wiki/Competitive_Tax_Plan.)
Delaware wealth manager Paul Bechly, president of the group, introduced Everson, 60, a native of Connecticut and a Yale University graduate. Everson, the 46th IRS Commissioner, is vice-chair of the alliantgroup LP, a national tax advisory consultant. In addition to his IRS service, he previously served in the administrations of Ronald Reagan, as well as for Indiana Gov. Mitch Daniels.
Noting that political handicappers regard him as a long shot for the Republican nomination, “it’s something I have to do,” Everson said in an interview. “I have the kind of experience, in administration, at both a state level and the federal level, as well as in the private sector, that the other candidates don’t have.” He noted that America has a political elite of 150 U.S. senators and governors, and “fully half of them think they’re ready to be president.”
Everson offered some bold thinking that will set him apart on the campaign trail, including vowing to:
• serve only one 4-year term as POTUS, and that he will work for a constitutional amendment limiting presidents to serving only one 4-year term, “to take out politics” from the equation of presidential leadership and service;
• strengthen the regulatory accountability of America’s financial institutions, which too often regard hefty fines as a cost of doing business, “like (paying) a speeding ticket”;
• press “reset” on American foreign policy, which he said under President Obama is being conducted “at the expense of our allies,” and he particularly called for strengthening the U.S. Navy;
• return to the draft for U.S. military service, to broaden participation in the military; and
• find a path to citizenship for the 11 million foreign nationals who have immigrated illegally to the United States.
Although he did not talk about it in his remarks, he openly admits and discusses being a flawed individual as a candidate, given issues of personal misjudgments, but says, “at 60, I’m older and wiser,” and he longs to return America to a “shared community of shared values.”
He notes an America where we might have had people living “on one side of the tracks, or the other side, but at least it was one set of tracks in one community,” and he says he wants to restore that sense of community in America. ♦
www.MarkForAmerica.com is his campaign website.