Alan Auerbach, Director, Robert D. Burch Center for Tax Policy and Public Finance, University of California, Berkeley
Urban-Brookings Tax Policy Center
Washington, DC

At an event discussing the prospects for tax reform at the Urban-Brookings Tax Policy Center, Alan Auerbach, the architect of the GOP tax reform proposal, admits three major flaws with the plan.  First, that his plan will stop the gaming because the effective tax rate will be zero, and the US will become a tax haven.  Then he admits that the plan will cause anyone with money invested in foreign assets, including those with 401(k)s and pensions, will lose $2 trillion in value.  He adds that others estimate this number to be much higher. Finally, he explains that poor countries with debt in U.S. dollars will see their debts skyrocket as the value of the dollar adjusts but callously suggests that this can be avoided if they simply go to Wall Street and hedge against the dollar.