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So, What Is a Border Adjustment?
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Tax, Tarrif, Border Adjustment
There are substantial differences.
So, What Is a Border Adjustment?
There are substantial differences.
So what is the difference between a tariff and a border adjustment? A tariff can raise the prices of specific imports from specific countries, singling out a country like Mexico, for example. The border adjustment, by contrast, is a broader measure that would reconfigure corporate taxation, for all goods from anywhere outside the U.S.
The border adjustment is expected to raise as much as $120 billion in revenue for the U.S. government, according to economist Martin Feldstein. But it would be a big shift, and some worry about how smoothly the theoretical model would play out. According to New York Fed president William Dudley, a border adjustment would not only be “pretty dramatic,” but would lead to likely lead to changes in “the value of the dollar, the price of imported goods in the U.S. and I’m not sure that would all happen very smoothly,” said Dudley after a speech at the National Retail Federation earlier this month.
So, What Is a Border Adjustment?
What is a border adjustment?
Ask the president. He'll tell you. It's simple. It means Mexico will pay for his wall.
Ask the president. He'll tell you. It's simple. It means Mexico will pay for his wall.
edit on 1/28/2017 by Phage because: (no reason given)
The daily minimum wage will increase from $73.04 to $80.04 pesos (currently, approximately $3.90 USD), as of January 1, 2017
edit on 28-1-2017 by D8Tee because: (no reason given)
These 2 paragraphs explain it better.
It's basically a value added tax or federal sales tax on anything sold in the US, whether it's made here or not. And it's also part of a plan to reduce corporate tax rates even further. Depending on how they implement it, our companies could pay no taxes on the goods & services they provide outside of the country, while American customers would have to pay the new "border tax" on those same goods and services in the country.
An example would be pharmaceutical products. They're already much more expensive here than in other countries. But under this border tax, they'd be even cheaper in other countries but more expensive here.
And here I thought that Repubs were for lower taxes. LOL
In the House Republican’s tax reform plan, the border adjustments are similar to a Value Added Tax (VAT). Both foreign and domestically produced products would be taxed, but exports—things made in America that are not sold here—would be exempt from tax. Higher taxes on imports paired with lower taxes on exports will theoretically cancel each other out, as demand increases for U.S. exports (they’ll be cheaper) and the U.S. will demand fewer foreign goods (since they’ll be more expensive). Economists say this will result in a shift in exchange rates that will the offset taxes: In theory, the dollar will strengthen as a result of increased demand for cheaper American-made products. Then, as a result of a stronger dollar, American-made products won’t be so cheap and foreign goods will become cheaper since a stronger dollar increases purchasing power—offsetting the import tax.
The border adjustment is also part of a plan that would reduce the corporate income-tax rate (something Trump has already promised American business leaders), since companies would be taxed where their income is earned rather than where products are made.
It's basically a value added tax or federal sales tax on anything sold in the US, whether it's made here or not. And it's also part of a plan to reduce corporate tax rates even further. Depending on how they implement it, our companies could pay no taxes on the goods & services they provide outside of the country, while American customers would have to pay the new "border tax" on those same goods and services in the country.
An example would be pharmaceutical products. They're already much more expensive here than in other countries. But under this border tax, they'd be even cheaper in other countries but more expensive here.
And here I thought that Repubs were for lower taxes. LOL
The outright ignorance displayed by Trump on this issue is frankly astounding. Does anyone actually think that we can impose tariffs/border
adjustments on foreign countries and they'll not do the same thing to us? We had exports in excess of $700B in 2015. That's a crap-load of business.
Imagine US businesses losing even 10% of that because of a trade war. You think that's going to lead to increased jobs? U.S. Farm exports
alone to Mexico was in excess of $76B in 2015. Farm exports to China (our largest export market) was over $85B that same year. Those two
markets alone account for over $160B in farm exports. And if we get into a serious trade war with Mexico could nationalize US companies there, as
could China. China could call in our debt. Sure --- screw them, we just won't pay. There are ramifications for our actions. This Trump strategy
may not be as cut-and-dry as Fearless Leader anticipates.
edit on 28-1-2017 by jtma508 because: (no reason given)
a reply to: jtma508
Trump is not an economist, nor does he have experience in international trade.
This IS however why every President has advisors who ARE experts in their respective fields to inform them.
To enlightened servant I'm absolutely hoping Trump doesn't pull a "Canada" and run with the VAT. It's not particularly working well for them, and it certainly hasn't helped the value of their currency.
In my defense of tis opinion I'm not versed in all it's nuances, I just know between the VAT and the GST tax as a tourist shopper up there I take a hosing, plus the cost of goods is excessive compared to the US.
Trump is not an economist, nor does he have experience in international trade.
This IS however why every President has advisors who ARE experts in their respective fields to inform them.
To enlightened servant I'm absolutely hoping Trump doesn't pull a "Canada" and run with the VAT. It's not particularly working well for them, and it certainly hasn't helped the value of their currency.
In my defense of tis opinion I'm not versed in all it's nuances, I just know between the VAT and the GST tax as a tourist shopper up there I take a hosing, plus the cost of goods is excessive compared to the US.
a reply to: Caver78 When people start to talk about trade protectionism they seem to forget that it's a two-way street. And
although Donald touts himself as the Master of the Deal, it should be pretty evident in his recent dealings with his penchant for trying to bully
other nations' leaders, that he's only going to make his/our ability to craft favorable trade policies less likely. His bellicose rantings and
dismissiveness of other leaders of state is an embarrassment.
This behavior is nor new, however. Back in the 70's he was trying to do a huge RE development project called 'Television City' was to be done on Manhattan’s West Side Yards. It was valued at $4.5B and would have been the biggest development project since Rockefeller Center. But the Deal Meister was unable/unwilling to negotiate with the various stakeholders (including Mayor Koch) and ended up taking it in the shorts --- even though at one point he had a chance to get out and make an almost 400% profit on his investment. His ego trumped his 'business sense'.
The 'project' continued to spiral down the crapper until his bankers forced him to relinquish control. Later he went to his 'fact spin-book' characterizing himself as “largest real estate developer in New York" which was entirely BS. You can read about that debacle here.
This behavior is nor new, however. Back in the 70's he was trying to do a huge RE development project called 'Television City' was to be done on Manhattan’s West Side Yards. It was valued at $4.5B and would have been the biggest development project since Rockefeller Center. But the Deal Meister was unable/unwilling to negotiate with the various stakeholders (including Mayor Koch) and ended up taking it in the shorts --- even though at one point he had a chance to get out and make an almost 400% profit on his investment. His ego trumped his 'business sense'.
The 'project' continued to spiral down the crapper until his bankers forced him to relinquish control. Later he went to his 'fact spin-book' characterizing himself as “largest real estate developer in New York" which was entirely BS. You can read about that debacle here.
a reply to: jtma508
you think people can`t eat more food and there are no people anywhere that want more food?
if the Chinese and Mexicans don`t want to buy our food anymore I`m pretty sure there are a lot of other countries with starving people in them that would thrilled to buy more food from the U.S.
you think people can`t eat more food and there are no people anywhere that want more food?
if the Chinese and Mexicans don`t want to buy our food anymore I`m pretty sure there are a lot of other countries with starving people in them that would thrilled to buy more food from the U.S.
February 21, 2017
WALMART is labeling it as a "Border Adjustment Tax" and is STRONGLY against it.
""Walmart is warning against President Trump's proposed border adjustment tax, saying it would raise the cost of goods for US shoppers.
"The border tax is a concern," Walmart Chief Financial Officer Brett Biggs said Tuesday on a call with reporters. "Anything that would raise prices for customers in the US is a concern for us."
The company had previously joined a coalition of retailers against the tax, but this is the first time executives have spoken out against it.
Trump proposed the tax, which would impose a 20% levy on Mexican imports, as a way to help pay for a wall along the US-Mexico border. The tax is now part of the US House Republican tax reform proposal.
Biggs said Walmart is generally in favor of tax reform, but not when it involves taxing imports. It's estimated that more than 97% of all clothing and shoes sold in the US are imported.
As the world's largest clothing retailer, that poses a huge problem for Walmart.""
Source: www.msn.com...[ed itby]edit on 2/22/2017 by carewemust because: formatting
WALMART is labeling it as a "Border Adjustment Tax" and is STRONGLY against it.
""Walmart is warning against President Trump's proposed border adjustment tax, saying it would raise the cost of goods for US shoppers.
"The border tax is a concern," Walmart Chief Financial Officer Brett Biggs said Tuesday on a call with reporters. "Anything that would raise prices for customers in the US is a concern for us."
The company had previously joined a coalition of retailers against the tax, but this is the first time executives have spoken out against it.
Trump proposed the tax, which would impose a 20% levy on Mexican imports, as a way to help pay for a wall along the US-Mexico border. The tax is now part of the US House Republican tax reform proposal.
Biggs said Walmart is generally in favor of tax reform, but not when it involves taxing imports. It's estimated that more than 97% of all clothing and shoes sold in the US are imported.
As the world's largest clothing retailer, that poses a huge problem for Walmart.""
Source: www.msn.com...[ed itby]edit on 2/22/2017 by carewemust because: formatting