March 30, 2017

WE ARE ALL NEOCONOMIST NOW:

Why I Support a Border-Adjustment Tax (WILLIAM J. JONES, MARCH 30, 2017, NY Times)

From my perspective, as the chief executive of an American manufacturer of currency processing and authentication equipment, a border-adjustment tax makes complete sense as part of an overall tax package.

In general, it's a good idea to shift the United States tax system toward consumption as opposed to production, which a border-adjustment tax would do. More than 150 of America's trading partners currently impose consumption taxes, or "value added" taxes, of up to 25 percent on American exports. This means that American-made exported goods are burdened with the costs of American taxes as well as those of foreign taxes. Our foreign competitors face no such consumption tax when entering the American market, but they enjoy value-added rebates from their home countries, which help lower their prices in our market.

My company needs corporate tax relief, but I don't want the country to incur huge budget deficits as a result. Nor do I want to see a big hike in individual income taxes. Additional revenue has to be found, though, and a consumption tax that raises revenues while leveling the international playing field would serve two valuable purposes at once.

Posted by at March 30, 2017 10:50 AM

  

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