Slemrod, Joel, and Jon Bakija, “Taxing Ourselves, A Citizen’s Guide to the Great Debate Over Tax Reform,” The MIT Press, 1996

“The introduction of a large VAT could allow us to reduce both personal and corporate income tax rates substantially, and perhaps even exempt most people form personal income taxation altogether.  Note, however, that it would not be a good idea to simply replace our corporate income tax with a VAT while retaining a personal income tax.  As noted earlier, the corporate income tax is an important ‘backstop’ to the personal income tax for taxing capital income.  Replacing it entirely with a VAT would create many inefficient and complicating avoidance opportunities involving the sheltering of personal income in businesses,” p. 248