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Much of what I will say here today is distilled from articles that I have written and things I have learned in putting together a book called Foundations of International Taxation. It is difficult enough to fashion sensible tax policy in the domestic arena. The debate, for example, over whether the United States should impose a value-added tax has some international aspects, but it is primarily a debate about domestic policy. This is true generally about the debate over how much we should rely on income versus consumption taxation. This debate amply illustrates how hard it is to obtain agreement on principles when we have, what Fred Goldberg calls, one Caesar claiming the revenues. In international affairs, we have at least two Caesars-two national governments – with legitimate claims to tax the income. We must decide how to divide the tax dollars between the two Caesars. Multinational corporations strive to pay taxes to neither. Disputes are inevitable. It is therefore very important to think about the underlying principles of international taxation and to be explicit about what we are trying to achieve.

"How the antitax fringe went mainstream--and now threatens America's future. The postwar United States enjoyed large, widely distributed economic rewards--and most Americans accepted that taxes were a reasonable price to pay for living in a society of shared prosperity. Then in 1978 California enacted Proposition 13, a property tax cap that Ronald Reagan hailed as a "second American Revolution," setting off an antitax, antigovernment wave that has transformed American politics and economic policy. In The Power to Destroy, Michael Graetz tells the story of the antitax movement and how it holds America hostage--undermining the nation's ability to meet basic needs and fix critical problems. In 1819, Chief Justice John Marshall declared that the power to tax entails "the power to destroy." But The Power to Destroy argues that it is tax opponents who now wield this destructive power. Attacking the IRS, protecting tax loopholes, and pushing tax cuts from Reagan to Donald Trump, the antitax movement is threatening the nation's social safety net, increasing inequality, ballooning the national debt, and sapping America's financial strength. The author chronicles how the movement originated as a fringe enterprise promoted by zealous outsiders using false economic claims and thinly veiled racist rhetoric--and how, abetted by conservative media and Grover Norquist's "taxpayer protection pledge", it evolved into a mainstream political force. The important story of how the antitax movement came to dominate and distort politics, and how it impedes rational budgeting, equality, and opportunities, The Power to Destroy is essential reading for understanding American life today."

To most Americans, the United States tax code has become a vast and confounding puzzle. In 1940, the instructions to the form 1040 were about four pages long. Today they have ballooned to more than a hundred pages, and the form itself contains more than ten schedules and twenty worksheets. The complete tax code totals about 2.8 million words-about four times the length of War and Peace. In this intriguing book, Michael Graetz maintains that our tax code has become a tangle of loopholes, paperwork, and inconsistencies-a massive social program that fails tests of simplicity and fairness. More important, our tax system has failed to keep pace with the changing economy, creating burdens and wastes of resources that weigh our nation down.Graetz offers a solution. Imagine a world in which most Americans pay no income tax at all, and those who do enjoy a far simpler tax process-all this without decreasing government revenues or removing key incentives for employer-sponsored health care plans and pensions. As Graetz adeptly and clearly describes, this world is within our grasp

By lowering the corporate tax rate from 35% to 21%, the 2017 tax legislation brought the U.S. statutory rate into closer alignment with the rates applicable in other Organisation for Economic Co-operation and Development (OECD) nations, thereby decreasing the incentive for businesses to locate their deductions in the United States and their income abroad. Its overhaul of the U.S. international income tax rules simultaneously reduced preexisting incentives for U.S. multinationals to reinvest their foreign earnings abroad and put a floor on the benefits of shifting profits to low-tax jurisdictions. The 2017 legislation also added an unprecedented, troublesome lower rate for the income of certain categories of businesses operated as partnerships or Subchapter S corporations. In combination, the provisions of the new law have created significant new differences in income tax based on what kind of business is being conducted, where goods and services are bought and sold, to and from whom they are bought, where and how assets are owned, the taxpayer's size, whether individual workers are employees or independent contractors, and where people live and work. The 2017 law also portends unsustainable increases in deficits and the national debt. The new tax system produced by this legislation provides neither an effective nor stable solution to the nation's economic and fiscal challenges.

The major tax policy challenge of the 21st century is the need to address the nation's fiscal condition fairly and in a manner conducive to economic growth. But since California adopted Proposition 13 nearly forty years ago, antipathy to taxes has served as the glue that has held the Republican coalition together. Even though our taxes as a percentage of our economy are low by OECD standards and low by our own historical experience, anti-tax attitudes have become even more important for Republicans politically, since they now find it hard to agree on almost anything else. So revenue-positive, or even revenue-neutral, forms of tax reform – at least as long as the GOP maintains its legislative majority – are politically impossible. The sad truth, of course, is that the coming tax cuts cannot possibly be the great and simplifying tax reform that the President and Sixers claim and that our nation so badly needs.

In 2002, referring to Iraq and its relationship to terrorism, Donald Rumsfeld declared "that there are known knowns, there are things we know we know. We also know that there are known-unknowns, that is to say we know there are some things that we do not know, but there are also unknown-unknowns—the ones that we don't know we don't know." There was nothing new in what Rumsfeld said, and some thought he was uttering evasive gibberish, but Rumsfeld's classifications are quite useful. Exploring known unknowns is, for example, much of the work of science. Donald Rumsfeld turned out to be a better epistemologist than a defense secretary. I shall begin briefly with some known knowns about the House Blueprint's proposal then turn to known unknowns. The business tax reform proposed in the Blueprint looks very much like a reform of the corporate income tax, but in reality it is closer to a repeal of the corporate income tax and the substitution of a cousin to a value-added tax (VAT). The Blueprint does retain some income tax features not found in a VAT; the taxation of net investment income and retention of flow through treatment of partnerships are important examples. The fact that the Republican proposal is more like a value-added tax than an income tax is difficult to explain to the public. Nevertheless, it is important to understand that the House Republican business tax reform—often referred to as a destinationbased cash-flow tax (DBCFT)—is equivalent to a subtractionmethod valued-added tax with a deduction for wages.