Back to 1913?: The Ryan Blueprint and Its Problems

15 Pages Posted: 21 Nov 2016 Last revised: 25 May 2017

Date Written: November 19, 2016

Abstract

With the election of Donald Trump and the Republican Party’s domination of Congress, it is time to seriously consider President Trump’s tax plan and House Speaker Paul Ryan’s blueprint for fundamental tax reform. The Trump plan lacks detail, but includes unrealistically large and regressive tax cuts. The Ryan blueprint combines reduced individual rates with a consumption or cash flow type business tax applicable to large businesses. This blueprint represents a regressive return to the type of tariffs that financed the US government before the passage of the Sixteenth Amendment in 1913, which is a betrayal of the working class voters that elected Mr. Trump. In addition, the Ryan blueprint has three major problems: It is incompatible with our WTO obligations and with our tax treaties, and will not solve the problems of income shifting and inversions it is designed to address.

Keywords: Paul Ryan, Donald Trump, Tax Reform

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S., Back to 1913?: The Ryan Blueprint and Its Problems (November 19, 2016). U of Michigan Law & Econ Research Paper No. 16-026. Available at SSRN: https://ssrn.com/abstract=2871801 or http://dx.doi.org/10.2139/ssrn.2871801

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

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