"Comment on Grubert and Newlon, 'The International Implications of Consumption Tax Proposals'"

Michigan Law Authors
Areas of Interest
Publish Date
1996
Publication
National Tax Journal
Publication Type
Journal Article
Abstract

Grubert and Newlon present a thorough, well-considered, and wellbalanced analysis of the international implications of the current proposals to adopt one of several consumption tax regimes in the United States. While agreeing with most of their conclusions, this comment (a) points out that Grubert and Newton's article implies, even though it does not explicitly state, that a destination-based consumption tax (like the USA business tax) is superior to an origin-based consumption tax (like the flat tax) on several grounds and (b) takes partial issue with Grubert and Newton's assessment of the likely reaction of other countries to the replacement by the United States of its income tax with a consumption tax, especially in regard to the likelihood that other developed countries may terminate their income tax treaties with the United States.