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Schmidt and Paravano Discuss New Cash Flow Tax System That Would Operate Under New Republican Tax Policy Blueprint

Articles / July 8, 2016

Partners Paul Schmidt and Jeffrey Paravano are quoted in an article published on June 28, 2016, on Bloomberg BNA. According to the article, “Will Republican Tax Blueprint Meet Trade Rules? Views Differ,” Schmidt and Paravano believe a new cash-flow system could work under the World Trade Organization’s rules that impose a tax on imports but not exports. The article reports, “Both attorneys said the plan would help level the playing field for U.S. companies, which now face a system making exports cheaper for corporations producing in other countries and U.S. exports more expensive for producers here.”    Paravano said the system seems a bit like a consumption-based model due to the economic impact of the plan's recommendation of an immediate deduction for expenses.  “That is very transformative and leaves companies producing in the United States and selling abroad better off than the tax systems of our major trading partners.” Both attorneys said the plan would help level the playing field for U.S. companies, which now face a system making exports cheaper for corporations producing in other countries and U.S. exports more expensive for producers here.