US House Republicans Defend Border Adjustment Tax

The US House of Representatives are considering a border tax, part of a plan to reform tax treatment of imports and exports – and prevent US firms from relocating headquarters overseas to evade taxes. The plan would replace revenues lost by another proposal to reduce the corporate tax rate to 20 percent. The legislators disagree with the president over details. Donald Trump prefers slashing the corporate tax rate to 15 percent, and suggests the border tax as proposed may be too complicated could be replaced with flat tax on goods crossing the border. “The purpose of a Trump border tax would be to pressure US-based automakers and other manufacturers to scrap plans to move production overseas,” reports Argus. Proponents suggest the border tax as planned would bring fairness to the process. US companies that rely on imports, like retailers, oppose the proposals and predict increased prices for US consumers. “Some analysts estimated that the provision would push up US crude prices and hit consumers at the pump,” which in turn would rise prices for producing and shipping other products. Other analysts suggest the proposal could increase the dollar’s value along with other unknown consequences. – YaleGlobal