KISS the Tax Blueprint Goodbye: Meet the 25-25-25 Plan

Abstract

Seeking definitive legislative success after the stall-out on healthcare, Congressional Republicans may want to keep it simple on tax reform. This paper examines the merits and demerits of a particular minimalist tax plan: lower the corporate tax rate to 25%; tax legacy foreign earnings at 25%; move to a “territorial” tax system for foreign earnings with a minimum tax patch at 25%. The paper uses analysis of this specific plan as a vehicle for clarifying some general considerations surrounding business tax reform.

Keywords: Tax Reform, Corporate Tax, Territorial, Repatriation, Competitiveness

JEL Classification: K34, H25