America’s losing with our current tax code
We all agree that the tax code is a mess and to me that the border adjustment tax is the best alternative currently on the table. What Sen. Tom Cotton describes in his column “Border adjustment tax is a gamble” is not BAT but value added tax, as practiced in Europe and many other countries. Under the VAT, anytime you buy parts from abroad you pay around 10%-25% tax. Therefore, under VAT prices increase by the amount of tax. It is different with BAT. You simply lose the possibility to deduct the expenses for parts bought from foreign countries. This is a win situation for the exporter without the bureaucracy of VAT. We do not know yet how BAT will be implemented, but it has the potential to simplify taxation and anybody who used to work under the VAT system will be glad to switch to something potentially much better. Walter Ochynski Naples, Fla.
Other nations are as concerned about their fiscal viability as we are about ours. If we tax imports at 20% from other countries, why wouldn’t they do the same to imports from the U.S.? So, instead of increasing our exports, they would then be decreased. This is just a repeat of the Smoot-Hawley Tariff scenario in the 1930s, which contributed to the Great Depression. Alton Gilbert
It’s not necessarily a one-on-one relationship between a border tax adding 20% and prices going up 20%. Yes, it will probably increase prices, but it’s more complicated. For example, some economists believe the dollar would appreciate somewhat as a result. The big issue is other countries put a tax on our products, which helps contribute to the massive trade deficit. Corey Tournet
The border tax is just a way of helping international trade come to a screeching halt. Andy Sandfoss