TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, August 8, 2017

Seto: The Most Significant Proposed Change In The History Of U.S. Corporate Taxation

Jotwell (Tax) (2016)Theodore Seto (Loyola-L.A.), The Most Significant Proposed Change in the History of U.S. Corporate Taxation (JOTWELL) (reviewing Alan Auerbach (UC-Berkeley), Michael Devereux (Oxford), Michael Keen (IMF) & John Vella (Oxford), Destination-Based Cash Flow Taxation):

The House Republican Blueprint for corporate tax reform would replace our century-old corporate income tax, which we all know and love (or hate), with a “destination-based cash flow tax” (DBCFT), which for many of us remains a mystery. The academic foundation upon which the House proposal is built is a working paper by Alan Auerbach (UC Berkeley), Michael Devereux (Oxford), Michael Keen (IMF), and John Vella (Oxford) (collectively “the authors”), entitled “Destination-Based Cash Flow Taxation.” Given the current turmoil in Washington, it seems unlikely that a DBCFT will be enacted any time soon. Problems with our current system for taxing business income with an international dimension, however, are unlikely to go away on their own. If you want to get up to speed on a radical solution with substantial academic and political support, this paper is an absolute must-read. ...

It is impossible adequately to summarize a 98-page paper in a Jotwell review. The authors deal with many more issues, far more thoroughly, than I possibly could in the space available here. Read the paper.

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