The Half-Truths On Border Adjustment

Opponents of the House Blueprint want to keep a broke system that promotes foreign-made products over American products and jobs.


MYTH: Border adjustment will cost families an extra $1,700 for basic necessities.
FACT: This figure looks at border adjustment in a vacuum. The overall plan is a significant tax cut. The combination of lower taxes and higher wages means the typical American family will have $4,600 more to spend each year.

MYTH: Border adjustment will cause our global trading partners to impose retaliation measures on U.S. companies.
FACT: More than 160 countries employ border adjustments to ensure their products don’t face a higher tax burden than imports. The House Blueprint merely rectifies the current unfairness and puts our producers on a level playing field with products from those other countries.

MYTH: Border adjustment would not be permitted under existing World Trade Organization (WTO) rules.
FACT: The World Trade Organization Director-General Roberto Azevêdo has said the WTO has a lot of “gray areas” and it’s still too early to tell if it would not be compliant: “There are certain types of taxes which you are allowed to deduct, for example on exports -- other types of taxes that are not…There are taxes in between. There are a lot of gray areas here. So I don’t know and I don’t want to speculate before we see an actual law or bill or legislation in place.”

Source: Tax Foundation Jul. 2016 | Inside Trade, Feb. 22, 2017

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