Oh, I beg to differ. Our system of taxation MOST CERTAINLY impacts the price of goods in the world market.
There is an arcane distinction here, between an indirect tax (such as the VAT) and a direct tax (such as the Corporate Net Income Tax). The WTO has ruled that an indirect tax is border adjustable without penalty. On the other hand, the CNI is not permitted to be adjusted at the US border...as a consequence, U.S. goods, to the extent that they carry any portion of the CNI burden, are disadvantaged in the global marketplace.
This distinction has been at the center of a trade dispute that is nearly 35 years old. Moreover, our global system of corporate taxation, as compared to a territorial system, further disadvantages goods produced by US companies....based here or overseas. This reality has lead to the corporate inversion phenomenon. Moreover, our system of corporate taxation increases the hurdle rate of return that any project contemplated within the borders must vault before it is undertaken.
No...the US system of taxation significantly disadvantages US goods in the world market, and we MUST stop the stupidity. The FairTax is the only way to truly unburden our exports...and entice foreign direct investment to the US.
Please see: The Role of Extraterritorial Income Exclusion in the International Competitiveness of US Companies, http://www.finance.senate.gov/sitepages/2002HearingF.htm/hearing073002.htm
My belief is that the income tax effect approaches zero.
I agree with the rest of your post. There is no way of calculating an effect from the CNIT since there is no theory that explains how it is a cost. This has been one of my concerns here.