A bipartisan discussion around President Donald Trump's desire to cut taxes needs to start with two key principles of Ronald Reagan's 1986 tax reform, the chairman of then-President Barack Obama's Council of Economic Advisors said Tuesday.
"The two most important are revenue neutral [and] distribution neutral," Jason Furman told CNBC's "Squawk on the Street." In other words, make the tax system more efficient without collecting any less money or shifting the burden.
"Focus on how to collect the same amount of taxes from roughly the same people. But just do it in a better way," he said. "Then just be technocratic about it and figure out way to collect those taxes."
Those elements were the starting points for Reagan's "successful bipartisan tax reform in 1986," Furman said. "Do it the way Ronald Reagan did."
Furman said the best way to start tax reform in the current environment would be to address the corporate code first. "Corporations move in response to tax rates much more than individuals do," he said.
The House Republican plan includes a border adjustment tax on imports to help pay for the overall package to lower the federal corporate rate to 20 percent from 35 percent.
"Border adjustment is a clever idea in terms of tax policy. But there are a lot of macroeconomic side effects. I don't think people have really thought those through," he said. "I would not go the border adjustment route, as sympathetic as I am to the idea."
In a Wall Street Journal op-ed, Furman said an alternative would be a minimum tax, which would "instead would apply to all overseas earnings at some intermediate rate." Obama proposed 19 percent and Republican Sen. Rob Portman supported a lower rate, he said.
Furman also wrote: "Closing loopholes and moving to an international minimum tax would provide some revenue. If the goal is revenue neutrality, then getting the rate down to 28 percent might be possible. But the 15 percent or 20 percent rate proposed by the Trump campaign and House Republicans, respectively, would be impossible without massively raising the deficit."
Earlier Tuesday on CNBC's "Squawk Box," Sen. Bob Corker said crafting tax reform will be tough, especially in the Senate.
"The Senate is composed of people that are total supply siders who could care less about the deficit. We're in charge, let's have a big time," said Corker, chairman of the Senate Foreign Relations Committee and a member of the Banking and Budget committees.
Supply-side economics — better known as Reaganomics — argues that greater tax cuts for investors and entrepreneurs provide incentives to save and invest, producing economic benefits that trickle down into the overall economy.
"Some huge tax cut that takes us underwater is just not interesting to me. Pro-growth reform is," said Corker, R-Tenn. He added it's "much better" to deal with taxes on a bipartisan basis.