The Rise and Fall of the Destination-Based Cash Flow Tax: What Was That All About? (Presentation Slides)

23 Pages Posted: 5 Jun 2017 Last revised: 7 Jul 2017

See all articles by Daniel Shaviro

Daniel Shaviro

New York University School of Law

Date Written: June 1, 2017


These slides, prepared for the keynote address at the Nordic Tax Research Council Annual Conference in Haikko Borga, Finland, on June 1, 2017, offer background regarding the reasons for the rise and fall of the destination-based cash flow tax (DBCFT) as an apparently live legislative option. They place this saga in the broader context of the U.S.'s being the only major country without a value-added tax (VAT).

According to Larry Summers' well-known joke: "The U.S. has no VAT because conservatives view it as a money machine, while liberals view it as a tax on the poor. We'll get the VAT as soon as liberals figure out that it's a money machine and conservatives see that it is a tax on the poor."

While the joke is often quoted, it tends not to be much analyzed. How might one explain the fact that things have not gone as Summers (seemingly reasonably) predicts? The slides address and seek to explain the apparent paradox.

Keywords: tax reform, destination-based cash flow tax, value-added taxes, U.S. tax politics

JEL Classification: H20, H24, H25

Suggested Citation

Shaviro, Daniel, The Rise and Fall of the Destination-Based Cash Flow Tax: What Was That All About? (Presentation Slides) (June 1, 2017). NYU Law and Economics Research Paper No. 17-20; NYU School of Law, Public Law Research Paper No. 17-23. Available at SSRN: or

Daniel Shaviro (Contact Author)

New York University School of Law ( email )

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New York, NY 10012-1099
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