Posted on 02/26/2017 4:48:37 AM PST by IBD editorial writer
Corporate Taxes: Nobody knows for sure whether President Trump supports a "border adjustment tax." That's fitting, since nobody really knows what this tax would do to the economy.
Trump has been hot and cold about the border adjustment tax. On Thursday, he told Reuters that he thought the tax "could lead to a lot more jobs in the United States." On Friday, Trump's top economic advisor reportedly said it was a nonstarter.
The tax is part of a wholesale rewrite of the corporate tax code proposed by the House GOP leadership, which they say will vastly simplify taxes, lower rates, increase exports, and help grow the economy.
The plan would swap the current 35% corporate income tax for a 20% consumption tax — or in policy-geek-speak "a destination-based cash flow tax." Because exports are consumed abroad, they'd be exempt from the tax. Imports, however, would face a 20% "border adjustment tax."
The idea has generated lots of attacks, including from this page, as well as claims that it would violate the terms of the WTO, hurt retailers like Best Buy and Target that rely heavily on imported goods, even hurt tourism.
The biggest problem with this tax reform, nobody has any idea what it will do.
(Excerpt) Read more at investors.com ...
eliminate corporate income tax
A friend who got a masters in economics said they’d work a problem, like whether to build a shopping center. The answer would be a resounding no. Then, they’d work the same problem figuring in the affect taxes had and the answer was a resounding yes. Taxes influence businesses to do things that are not sound policy for the rest of us.
Yet IBD staff writes a headline "Say no to the Border Tax
Besides being mildly anything-phobic, the title also misdirects the problem about what to do with imports vs. exports and throws that into the broiler border issue (by name) dealing with immigration and illegal entry.
I don’t know why any American would buy into the premise that annual trade deficits with our trading partners is a bad thing (urp).
Don’t think of it as a border tax, think of it as a VAT on imports. There, isn’t that better?
If Congress spent it, let Congress PAY FOR IT!
We authorized it and expected Congress to carry out our wishes.
They are still under our contract that they will fulfill or be replaced.
Once a tax is created it is hard to repeal. And then future Democrat administrations will bastardize it. True conservatives should never trust any tax as a solution.
More tariffs and less income taxes.
Every founding father was a protectionist and they governed the USA after Adam Smith's writings on free trade. The USA became a world economic industrial power behind a wall of tariffs. Just like China ia doing today. FACT.
If IBD is against it then I am for it.
I WANT the feds to get addicted to tariffs and the BAT. More consumption based taxes and less income taxes are the solution. Especially taxes targeted at foreign imports. win - win.
FUIBD
Create a new tax for all wire transfers that are sent to Mexico by the Mexican tax cheaters. Problem solved.
the status quo and so called free trade is a Monumental failure..when other countries can employ slave labor and not meet environmental laws like our
Companies have to..a border tax is the only way to level the playing field
free traders are really pro-slave labor..they want the cheap wages
I don’t know why these writers are all looking at this from one view point - consumer prices. The reality is taxes, regulations, labor costs, etc. present a one way slate of incentives to produce offshore. Another reality is that every other nation in the world uses this tax, we Americans are financing other countries governments with it.
The selling points of this proposed tax are twofold: a) is for no one to pay it by producing within the US and b) to honor savers by recreating King Dollar ! It’s simply a very effective counter measure to the misplaced incentives above that can be swiftly injected to the blood stream instead of waiting for the dismemberment of leviathan. Pretty clever, a tariff regime you don’t want anyone to pay.
Lastly, since the details aren’t clear to even smart money people I feel we should take it up separately and not cloud the business and individual tax debates up with it.
Trump always specifys the tax would be on just those companies that leave the USA and move manufacturing offshore and then export them back here. That is a narrow group and does not apply to all imports into USA.
Excellent post.
FairTax IS the answer!
Consider this:
The USA has been screwed (and screwing itself) in respect of trade ever since WW II! Because, the USA is the only major country in the world that has no border adjustable tax (VAT or GST)!
So, our trading “partners” export their goods FRee of taxes (border adjustable taxes are REBATED at their border) and are imported into the USA with no or minimal USA import duty or taxes.
And, USA goods are exported FRom the USA carrying the ENTIRE BURDEN of taxes imposed by the EVIL USA Corporate income tax, which is, of course, NOT BORDER ADJUSTABLE!
Adding insult to injury, importing countries add their VAT to the USA import, causing USA goods in EVERY ONE OF OUR major trading “partners” marketplace to carry the burden of TWO federal taxes (USA and the importing country VAT/GST) while foreign goods sold in the USA carry the burden of NO (or VERY minimal) federal taxes!
The absence of a border adjustable tax is causing US manufacturing goods to be overpriced, relative to their foreign competitors, at home and abroad!
At a MINIMUM, one would expect USA import duties to be exactly equal to the rebated VAT/GST FRom our respective trading “partner,” would one not? To AT A MINIMUM, level the playing field in the USA.
Actually, there is a VERY good solution to this dilemma we find ourselves in - the FairTax – HR 25 and S 18.
IMHO, FairTax WILL solve the FRee/Fair Trade issue VERY nicely!
FairTax levels the playing field both at home and abroad: FairTax imposes NO tax on businesses, so under the FairTax, USA exports will compete on price, quality and availability overseas and at home, because the FairTax would ALSO be levied on imported goods at the point of sale.
This is a long post, but the BS we have been hearing come out of Washington, DC about “border taxes” is just that!
FairTax IS the answer!
We need your help in order to replace the income tax with the FairTax and abolish the IRS.
The USA will NEVER be a FRee country so long as we have an income tax and an IRS!
To find out more about the FairTax, go to https://www.fairtax.org.
————Because exports are consumed abroad, they’d be exempt from the tax-—
The constitution prohibits a tax on exports.
At issue is a universal tariff on all imports. The evidence seems to be that the concept of taxing every item imported on the General Agreement on Tariffs and Trade is not popular enough to pass muster.
Trump wants to make deals to achieve his trade goals. such a law would tie his hands. Trump wants to negotiate one on one to achieve a satisfactory balance of trade. His primary target is China from which he believes he can use the threat of tariffs and other barriers as leverage to obtain desired concessions.
The talk of a border tax is just talk, nothing more.
The issue is how soon will the corporate income tax be reduced and the big earnings $$$ parked off shore be brought into the economy
We need a 20% tariff and a NRST. Kill the income tax and watch the USA explode economically..
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.