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Alvin C. Warren Jr., Evaluating the Oxford Proposal for a Corporate Cash Flow Tax, 173 Tax Notes Fed. 1223 (2021).

Abstract: Following several years of study, the Oxford International Tax Group recently proposed a fundamental reform: the traditional corporate income tax would be replaced by taxation of a corporation’s domestic cash flows. One, perhaps surprising, argument for this proposal is that its incidence would fall primarily on a country’s residents who own shares in domestic and foreign companies. For example, equilibrating changes in floating exchange rates would transform a U.S. tax on U.S. sales by U.S. and foreign corporations into a tax on U.S. shareholders of U.S. and foreign corporations, wherever their sales occurred. The Oxford Group indicates that resulting tax burden is very likely to be progressive. If, however, a progressive tax borne by individual owners of corporate stock is desirable, why not tax shareholders directly? The purpose of this comment is to illustrate the equivalence of the two taxes with a simple numerical example and to stimulate their comparison.