In late February, President Donald Trump spoke positively about a proposed border tax. Paul Ryan spokesperson Brendan Buck reflexively updated his Twitter account.
In a tweet sent on February 23, the spokesman for Speaker of the House Paul Ryan stated that “President Donald Trump spoke favorably about an export-boosting border adjustment tax proposal being pushed by Republicans in the U.S. Congress.
However, the President did not specifically endorse the border tax.
Trump has been noncommittal about a border tax adjustment from the idea’s inception. He’s offered comments stating that “it could lead to a lot more jobs in the United States,” but has never given the proposed tariffs a definitive nod. To the contrary, Trump has stated that the tax was “too complicated.”
While Trump does not seem in complete opposition to a border adjustment tax, it’s not clear as to which tax proposal he is supporting. As it happens, there are two.
Since Trump’s campaign, Congress has proposed a number of border tax changes. One is an outright tariff on foreign goods. It’s a tariff which is to be imposed on American companies to discourage the outsourcing and re-import of products and services. The other is a plan to convert the corporate income tax into a cash flow tax, targeting consumption funded by capital income.
The two policies sound similar, but they’re quite different. The first proposal is a protectionist policy, which directly impacts companies seeking to do business outside of the United States. The latter is more in line with free trade politics, causing a full currency adjustment.
President Trump has previously spoken positively (though without commitment) of a border tax which would levy tariffs on imports. But House Republicans have been advocating for the alternative.
It’s impossible to predict which the President will ultimately support, but he currently tends to lean toward a more protectionist political stance.
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