When we export we are selling dollars. There is greater demand for dollars thus the currency APPRECIATES not deprecitates. I think you are trying to describe import effects.
True, but is not the issue, the discussion is what is the effect of increasing one's competitive advantage in world trade through reduction of domestic tax burdens on a business by going to a tax sytem that is border adjustable that is does not export taxes into foreign markets such as a VAT that rebates taxes at the border and most certainly a retail tax system that does not burden upsteam businesses to begin with.
I describe the what the markets respond with pushing trade balances toward natural equilibrium point in such cases.
Refer #1061, for the economic basis of that description.
You are postulating a price effect on exports from income taxes which I do not believe exists. Other taxes, representing a true cost of production, do cause export prices to be higher.
Retail Sales taxes do not affect export prices, as exports are not burden with retail taxes.
Going from a income/payroll tax system to a retail tax system removes costs and tax burden from a export businesses and their upstream suppliers which provides the advantage of being able to export at lower costs than would otherwise exist creating a advantage in foreign trade markets relative to the income/payroll tax case.
Was my conclusion correct in that you were describing imports?
I agree that sales taxes do not affect exports I was merely referring to the payroll taxes.
Imbalances do set up the means of returning to equilibrium I don't think there is any contention to the contrary wrt that. However, the fact that the dollar is a reserve currency for world trade prevents that mechanism from working completely.
VAT are not the only taxes in Europe and it is not unified wrt to tax systems. Some countries also have taxes on corporations as does the US. To that extent WTO rules would not allow the US to develop an advantage by removing CNIT.