Comparison of Current Law and Major Reform Proposals Present Law Summary Theoretically, a progressive tax on corporate and personal income. Complex depreciation, inventory accounting. Inflation still a big problem. Progressive rate structure. Personal Tax Numerous special provisions make tax a complex hybrid of income and consumption bases.
Business depreciates capital cost over asset life.
Debt favored relative to equity. Considered large drag on economy relative to pure forms of alternatives. Summary Separately, or in combination, replaces corporate and personal income tax with broad-based consumption tax. With a VAT, businesses taxed on difference between gross revenue and input costs including purchases of capital goods. With a retail sales tax, a flat percentage added on retail price of goods and services.