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International Aspects of Fundamental Tax Restructuring: Practice or Principle?, 51 University of Miami Law Review 1093 (1997)

Abstract

The globalization of economic activity, including the expansion of international trade, the amazing ability of international capital markets to transfer capital rapidly across borders, and the movement in Europe toward greater economic unification, have made it more difficult for nations independently to fashion tax laws that properly balance their own equity, economic efficiency and simplicity goals. This is what makes this conference to analyze the international aspects of recent proposals to replace the federal income tax with some form of consumption tax, with particular emphasis on the Nunn-Domenici "USA" tax and the Armey-Shelby flat tax ("flat tax"), so important. As the paper by Stephen Shay and Victoria Summers well demonstrates, it would be absurd to consider major tax restructuring in the United States without assessing the potential effects of such a change on international flows of capital and trade, on our existing treaty network, and on our domestic international tax law. We must also anticipate the likely responses of other nations. The first lesson is that the forms of consumption tax proposals that seem to enjoy the most political support in the United States today are unique creations both in their structure, and because they would completely supplant the current income tax system. Indeed, it is this uniqueness that makes the Shay-Summers paper so important and the discussion at this conference so necessary.

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1997

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