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 ...
Damn, another antibusiness mole to whack
Production would wish to be a close to consumption as possible were it not for the onerous (originally illegal) income tax.
That tax made it more profitable to move production to a foreign location for local consumption.
This caused a distortion in the marketplace leading directly to this situation.
REPEAL THE SIXTEENTH AMENDMENT!
This IBD article is just more dung slinging by the globalist chimpanzees.
Another anti America globalist to whack.
There is no limit to the ignorance of these a-holes.
They (you?) Do not decry the regulations and taxes that drive production overseas, so it’s reasonable to assume they support them.
That is the problem.
So, if it’s good to place regulations and taxes on American business then what’s the problem with burdening imports in the same fashion, if they are so positive.
I think the IBD and it’s ilk hates middle class America. I think they value foreign workers over Americans. I think they use domestic regulation to generate business opportunity overseas for their cronies.
If production is to be heavily taxed and regulated, let it be so for imports too.
The BAT hurts IBD cronies. It hurts globalists, it helps domestic production. It helps domestic competitiveness.
Your globalist pants are around your globalist ankles. Now your globalist ass is exposed and hanging out for all to see. We don’t like it. Pull you pants up and fix domestic taxes and regulations if you don’t want a BAT. You don’t want to.
That’s my objection to your objection to the BAT.
I trusts President Trump’s instincts far more than this IBD staff writer....
Many (if not most) of the countries we compete against in trade have a value added tax. My understanding is that in most cases the value added tax is not applied to goods that are exported from that country, but are applied to goods imported to that country. So if a company in Germany exports goods to the US they do not pay the value added tax. However, if a USA company exports to Germany, the US products are taxed. The end result is that USA products are at a disadvantage.
The US already has a tax break of sorts for companies that produce goods in the US. It is the Domestic Production Activities Deduction (IRS form 8903). This is one of most overlook tax deductions for small businesses. With tax coming due in a few weeks, if you own a small corporation and produce goods in the US you need to look into this. There is a small business option that is easy to figure.
Relative to imported goods, the FairTax IS a 23% border tax, and, unlike the proposed “Border Tax” that is being bandied about in WDC, is completely legal according to international law.
IOW, border adjustable taxes (VAT/GST taxes, which are rebated to companies exporting goods and imposed on imported goods at the point of sale) are legal whereas a specific “Border Tax,” imposed at the border is not legal.
As I mentioned in post #23, FairTax levels the playing field in respect of US imports and exports.
That is, after all, the objective here, is it not?
You are dead wrong!
See my post #18.
No, it is not. Y’all need to re-read my post #18.
Please see my post #18.
If you go anywhere else in the world and try to purchase any American made product you have to pay an import fee of some damn kind.
If other countries essentially tax our stuff, we should tax their crap coming in.
Try buying a Cadillac in South Korea or Japan. 400 percent import fee. And how many of their crappy vehicles are sold here with NOO fee?
Ask any FR “free-trader”...
“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.”
Yup.
And according to this article: 35% corporate tax would be replaced by 20% TARIFF.
We’re already paying the 35% for consumer goods. If enacted, we’d be paying only 20%, and less on domestic goods (like Fracked oil).
Tariffs are specified IN the Constitution as a means of raising revenue. You need to read USC again.
Disagree. Changes to the tax code, including tax credits or income exclusions for exports and eliminating tax deductions for foreign expenses, need to be done through Congress. That is just to level the playing field with the way other countries add VAT to US goods and credit their own VAT on their exports.
Trump can do tariffs by himself as a negotiating tool in bilateral trade agreements, and as a disincentive for American businesses to outsource. That is separate from the main issue of tax reform.
The only thing wrong with the House plan is that the Corporate Tax rate should be 15% instead of 20%.
FRankly, I don’t care whether tariffs are “specified” in the Constitution or not. That point is not germane to this question.
Historically, punitive tariffs have had a negative impact on the US economy - does the phrase “trade war” have meaning for you?
The FairTax totally eliminates the possibility of trade wars, whereas punitive tariffs guarantee them.
Trade wars lead to real wars, and should be, IMHO, avoided.
——including tax credits or income exclusions for exports -—
That is an interesting concept. I don’t know how the accounting would be structured though.
Simply report for every sale where it happened and for every payment where it went. If the sale was outside the country, it doesn’t count toward revenue, therefor no income tax is paid on that income. If the expense was out of the country, it doesn’t count as an expense, which results in paying income tax on it as profit.
Due to state sales taxes, even businesses that do not sell retail already have to report their sales broken down by location. I know because I was the IT manager for a wholesale electronics company and had to create those reports every year at tax time.
Same for expenses, where a 1099 needs to be generated and reported to the IRS to ensure the recipient of your payment is in turn paying taxes on it.
Two fallacies in one sentence! First of all we are in a trade war now! You can't start a trade war by actually retaliating. Secondly tariffs have been wildly successful every time they have been tried. Especially the USA from 1897 to 1913. So you are full crap. You are probably a product of a business school indoctrination.
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