Time for Republicans to Pull the Plug on Border-Adjustable Tax Scheme | International Liberty

“We already know that the flat tax is the gold standard of tax reform. And we already know the various ways of moving the tax code in that direction.

My advice is that Republicans abandon the border-adjustable provision and focus on lowering tax rates, reducing double taxation, and cutting back on loopholes. Such ideas are economically sounder and politically safer.”

As part of an otherwise very good tax reform plan, House Republicans have proposed to modify the corporate income tax so that it becomes a “destination-based cash-flow tax.” For those n…

Source: Time for Republicans to Pull the Plug on Border-Adjustable Tax Scheme | International Liberty

2 thoughts on “Time for Republicans to Pull the Plug on Border-Adjustable Tax Scheme | International Liberty

  1. I think Forbes and other flat tax advocates chanted the “everyone pays something” mantra. But if over half of population pays nothing and gets welfare benefits and $2,500 cash rebate for each kid how do they pay something? Any something is meaningless as is negated by the much more than something flow back. .

  2. Flat tax rate systems with simple very limited deductions are associated with much better economic performance. This is because there is no punishment for savings, no double taxation and no inheritance tax. So success if not punished.

    Of course, a flat tax does not preclude a poverty exemption below which no tax is paid. Then each dollar above the margin in then taxed at same rate for everyone with generous exemption for all income below poverty level. This still makes it progressive.

    The main point here is border adjusted taxes are just tariff protectionism by another name and result in higher prices. If you are going to have a border adjusted tax, it should be equal on imports and exports…. which begs the question, why not just zero it out?

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