Trump and Trade: Peril and Promise of a Border Adjustment Tax

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Cato Institute

Immigration, News, News Commentary, Peace, 424708, Markets, Government, Libertarian, Policy, Politics, Cato, Defense

4.5 • 979 Ratings

🗓️ 13 January 2017

⏱️ 17 minutes

🔗️ Recording | iTunes | RSS

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Summary

The "border adjustment tax" may be a move to head off a possible trade war undertaken by President-elect Trump. Dan Ikenson and Dan Mitchell discuss the risks and opportunities of such a plan, and alternatives that should be on the table.

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Transcript

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0:00.0	This is the Cato Daily Podcast for Friday, January 13th, 2017.
0:07.0	I'm Caleb Brown.
0:08.0	How We Tax Imports and Exports may be the most substantial fight Congress has over trade policy during the
0:14.8	Trump administration.
0:15.8	The Kito Institutes Dan Mitchell and Dan Eikinson discuss the so-called border adjustment
0:21.3	tax and what it means for free trade.
0:26.0	President-elect Trump has been threatening all manner of tariffs on goods
0:31.2	imported from around the world.
0:34.0	House Speaker Paul Ryan has said that comprehensive tax reform with, in his words, a border adjustment tax tax which is something House Republicans are talking
0:45.5	about could achieve Donald Trump's goal without sparking some kind of trade war.
0:51.2	So let's unpack what that actually means. What is a border adjustment
0:57.1	tax and how does that work within our system of trade internationally.
1:03.0	The House Tax Plan, called the Better Way Plan, introduced by Paul Ryan and Kevin Brady,
1:08.0	does a lot of things that tax reformers have always wanted, a lower rate, full expensing of business investment,
1:15.4	territoriality, death tax repeal, lots of good pieces, but in order to try to
1:21.2	make the numbers add up,
1:23.3	they put in place a big tax on imports
1:26.2	coming into the country.
1:27.4	But not in a classic sort of protectionist,
1:29.7	this is a tariff.
1:31.0	They changed the rules of business taxation to say that exports from America
1:36.0	will no longer be in the tax base.
	...

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