Monday, January 30, 2017

"The drastic Republican border-tax package"

The title of the article is Jack Mintz: Why the drastic Republican border-tax package probably won’t happen. At the Financial Post.

Jack Mintz strikes me as just like all the other guys saying President Trump's economic policies won't work. I'll take advantage of this opportunity to say the people criticising Trump-o-nomics are probably the same people who didn't see the crisis coming, and who have not much changed their thinking in the years since. Just a guess, but that is how it strikes me.

So I'm not going to quote any part of Mintz's article except this:
The proposal has three major elements. First, the federal corporate tax rate would be reduced from 35 to 20 per cent. Second, comes the cash-flow tax, which would allow companies to expense investments, but they could no longer deduct the interest they pay on debt. Third comes the border-adjustment tax, where companies would pay no corporate income tax on all export revenues, but would also no longer be allowed to deduct the cost of imported inputs from their taxable profits.

There are things in there that I don't care for, and things in there that I don't care about. And there is this:

They could no longer deduct the interest they pay on debt.

Of all the things that must be done, this is right up at the top.

// Update:

For more on the tax proposal see Border Adjustments, Tariffs, VAT, and the Corporate Income Tax the Conversable Economist.

1 comment:

The Arthurian said...

27 July 2017: Speaker Ryan admits defeat, giving up on border adjustment tax:

"The import tax measure was opposed by many Republicans and White House advisers because they argued it would drive up costs for millions of Americans on a range of items, including clothing, electronics and automobiles."

Costs and incomes. It would drive up costs and incomes for millions of Americans.

PS: The expansion of imports is not a good anti-inflation policy.