Thread by @gregleiserson

So I guess #DBCFT twitter really didn't do a good job of explaining the concept... 1/

One could (loosely) think of DBCFT as the current corporate tax less the normal return less foreign-source income 2/

Various arguments proposed for the shift to a domestic consumption base, including traditional consumption tax arguments and base erosion 3/

Little reason to cut the rate on this base. Of course, House GOP obscured this by proposing a giant rate cut as part of the plan. 4/

More generally, the rate cut arguments seem excessively focused on international profit shifting 5/

and relatively unconcerned about shifting between domestic bases in a way that doesn't quite make sense to me 6/

(Of course, if the corporate rate remains high enough, shifting between domestic bases is less of a concern) 7/

Anyway, I am happy to sign up for the position that we should focus on the important reforms to the base 8/

Such as repealing interest deductibility (willing to offer some expensing in exchange) and worry much less about the statutory rate 9/

More generally, it's underappreciated the extent to which the tax plan will likely be seriously subpar policy even from cons perspective 10/

Traditional conservative perspective: swap higher taxes on labor for lower taxes on capital (e.g. a VAT but don't call it such) 11/

But the R plan retains taxes on the marginal return to capital and cuts taxes on excess returns/disguised labor/pass-through labor 12/

One might say it's a caricature of Republican views on tax policy, but like AHCA/BCRA/HCFA it appears to be Republican policy 13/

And, as I snarked earlier today, is basically the plan I would design if someone asked me to create the biggest windfall for old capital 14/

And to think I was sad the DBCFT died before I ever meaningfully participated in DBCFT twitter. Guess there are always second chances. 15/15

The loosely in the second tweet is even looser than I intended because I described a territorial cash flow tax. Try to look past that. 16/15