Larry Summers' view of U.S. international taxation is similar to mine, except for one thing

Larry Summers has an op-ed in today's Washington Post in which he takes a view of international tax policy that is similar to mine, with one significant exception.

"As a very general rule, improvement is possible anytime tax rules are experienced by taxpayers as a substantial burden without generating substantial revenue for the government. Having taxpayers be burdened less and pay more can make them better off and help the fiscal situation. The United States should eliminate the distinction between repatriated and unrepatriated foreign corporate profits for U.S. companies and tax all foreign income (after allowances for taxes paid to other governments) at a fixed rate well below its current corporate rate, perhaps in the range of 15 percent.

"A similar tax should be imposed on past accumulated profits held abroad.

"Such a proposal could easily be designed to raise revenue relative to the current baseline, encourage the repatriation of funds and reduce the competitive disadvantage faced by U.S. multinationals operating abroad. It is about as close to a free lunch as tax reformers will ever get."

The one exception is that he still favors foreign tax creditability - wheher because he hasn't sufficiently thought through the issues that it raises, or because he assumes it is a built-in constraint, or because the proposal would then get too complicated to explain in a 750-word op-ed.

But the same line of argument that he relies on for his proposal would support making foreign taxes merely deductible in revenue-neutral exchange for a lower rate on foreign source income - leaving aside the additional complication that one might want to impose a higher U.S. rate on tax haven income than other foreign source income, so long as one stops short of making U.S. taxpayers indifferent to their foreign tax liabilities (as the foreign tax credit does, by providing 100% reimbursement).