First, under no circumstances should Republicans agree to make the tax
system even more progressive than it already is, or to increase the
number of people who do not pay income taxes. ...
Second, government should collect the minimum revenues needed to support
and protect a free society and do so in a way that is, as far as
possible, neutral in its effect on individual behavior. ...
Third, Republicans should require all similarly structured firms be treated the same. ...
Fourth, business subsidies and credits should be eliminated....
Fifth, all costs of production should be equally deductible when they
are actually incurred, and all income should be recognized at the time
it is actually earned and taxed only once. ...
Sixth, tax reform should move toward the elimination of taxes on the
foreign earnings of American companies, whose profits are already taxed
Some final advice: Compromise is fine if it moves you in the right
direction. But don't compromise on things that will only make rational
reform harder in the future. If you can improve the tax code and help
the economy now, do it. But remember, the Obama administration too shall
pass, and a poor deal now will make a good one harder to achieve in the
The United States should eliminate the distinction between repatriated and unrepatriated foreign corporate profits for U.S. companies and tax all foreign income (after allowances for taxes paid to other governments) at a fixed rate well below its current corporate rate, perhaps in the range of 15 percent. A similar tax should be imposed on past accumulated profits held abroad.
a proposal could easily be designed to raise revenue relative to the
current baseline, encourage the repatriation of funds and reduce the
competitive disadvantage faced by U.S. multinationals operating abroad.
It is about as close to a free lunch as tax reformers will ever get.