Trump Leaves Open the Question of Whether Tax Reform Will Include Trade Elements
His administration could either omit or include trade elements -- the “border adjustment” aspects -- in its tax reform plan expected to roll out later this year, President Donald Trump said during an interview on Fox Business (here), according to a transcript (here). “We ... could keep trade and we could keep certain things separate,” Trump said. “We may put it in the tax code or we may keep it separate. We have a lot of different things.” Trump also expressed opposition to the term “border adjustment,” saying it means “we lose,” and suggested rebranding the term as an “import tax,” “reciprocal tax,” “matching tax” or “mirror tax.” “When you say reciprocal, nobody fights you,” Trump said. “When you say I'm going to charge a 10 percent or a 20 percent border tax, everyone goes crazy, because they like free trade,” Trump said. “Well, they don't say that the other countries are charging you much more than that.”
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Meanwhile, House Ways and Means Committee Chairman Kevin Brady, R-Texas, continued his push for the House GOP tax reform plan in a guest column for the Orlando Sentinel (here). Brady wrote that the current U.S. tax code results in double taxation of U.S.-made products -- once in the U.S. market and once in the foreign market where they’re sold. In contrast, U.S. imports bear no U.S. tax and flow into the U.S. with foreign taxes removed, in part, because other countries employ a border-adjustable framework, Brady wrote. Brady also highlighted a recently released Tax Foundation estimate on the plan (here).