Border Tax Adjustment

[Kathianne]

Seems to be flying through the Congress and is being pushed by Trump. I've just started reading about it, seems very different than what I thought he was going to push for. Good for big business, not so good for consumers.

Perhaps I'm misunderstanding and someone can enlighten how taxing imports, but giving tax breaks for those companies exporting, will help Americans?

[Gunny]

Seems to be flying through the Congress and is being pushed by Trump. I've just started reading about it, seems very different than what I thought he was going to push for. Good for big business, not so good for consumers.

Perhaps I'm misunderstanding and someone can enlighten how taxing imports, but giving tax breaks for those companies exporting, will help Americans?

Do I even want to know what a border tax is?

[Balu]

Seems to be flying through the Congress and is being pushed by Trump. I've just started reading about it, seems very different than what I thought he was going to push for. Good for big business, not so good for consumers.

Perhaps I'm misunderstanding and someone can enlighten how taxing imports, but giving tax breaks for those companies exporting, will help Americans?
I'll try...
Increasing import taxation makes imported commodities less competitive, thus giving preferences to domestic.
Giving tax breaks to exporting companies stimulate there work in general, causes expanding production and increasing employment, providing additional revenue to the budget.
In turn, the expansion of production gives a rise of employees and workers income, which contributes to the growth of domestic trade and services. People are starting to spend more.
This is in brief.

[Kathianne]

Do I even want to know what a border tax is?

I read a lot. From what I was getting during the election it seemed that the incentives were going to be to keep US Companies in the US to keep jobs or they would 'pay bigly.' For the past 2 months, been reading about how great this is turning out, I'm as happy as anyone that a company is keeping 1000 jobs here, rather than building in Mexico or elsewhere.

Now though, reading that there seems to be some very big incentives for companies to stay in the US and export their products elsewhere, as to sell them here would actually cost them 'bigly.' Things that aren't made here, thus imported, will basically be hit with a heavy tax.

From what I can discern, in my not so great economic understanding is that for instance oil that is imported will be heavily taxed. It will then be refined into gasoline. The cost at the pump may go up .30 or more per gallon. There seems to be a new tax incentive for companies that make products here, but sell them outside the US. Thus industries that have 'left' such as clothing, shoes, etc., might be better off coming here and selling outside the US. Meanwhile, imported items such as clothing and shoes, will be hit with the import tax, raising prices again by 20%.

Here's one written by Steve Forbes, he is trying to keep the blame from Trump:

http://www.forbes.com/sites/steveforbes/2017/01/11/omg-house-republicans-are-preparing-to-hit-consumers-with-a-horrible-new-tax-that-will-harm-trump-and-hurt-the-economy/#31603ef1641e

Unfortunately this one not so much:

https://www.bloomberg.com/news/articles/2017-01-11/trump-s-border-tax-threat-may-weaponize-the-dollar


From what i can figure right now, looks like US consumers, especially those in lower income brackets, will get much higher prices. OTOH, lots of incentives to keep Lockheed, Boeing, and other big exporters raking in the $$$.

[Kathianne]

I'll try...
Increasing import taxation makes imported commodities less competitive, thus giving preferences to domestic.
Giving tax breaks to exporting companies stimulate there work in general, causes expanding production and increasing employment, providing additional revenue to the budget.
In turn, the expansion of production gives a rise of employees and workers income, which contributes to the growth of domestic trade and services. People are starting to spend more.
This is in brief.

and way too simplistic.

[Balu]

and way too simplistic.
Let us make it a bit more complicated.
Exporting, for example, the armament is not only exporting the items. It also is a creation of service and maintenance network, accoupled with spares supply, personnel training etc.
Besides, every new working place in industry creates 3-5 additional working places in service. The increase of production cause the increase of transportation. All these cause the development of infrastructure, resulting stimulation of activity of different industries to supply the demand.
Thus we see a kind of chain reaction.
Something like this.

[Gunny]

and way too simplistic.Okay. In other words we are changing our trade tariffs. Again. Doing that has started more wars for this country than anything else. Internal and external.

[fj1200]

Perhaps I'm misunderstanding and someone can enlighten how taxing imports, but giving tax breaks for those companies exporting, will help Americans?

Um, imports are more expensive and exports are cheaper to the world; I think the German plan of rebating any VAT back to any firm of what they export is similar in some respects. Nevertheless if you consider higher prices helping Americans it won't, if you consider export based jobs helping Americans it will... of course all this presumes no changes by the rest of the world which is unlikely with Mexico threatening "immediate" response.

[Kathianne]

Um, imports are more expensive and exports are cheaper to the world; I think the German plan of rebating any VAT back to any firm of what they export is similar in some respects. Nevertheless if you consider higher prices helping Americans it won't, if you consider export based jobs helping Americans it will... of course all this presumes no changes by the rest of the world which is unlikely with Mexico threatening "immediate" response.

Yep, it sounded to me to be a way to make a VAT tax, without calling it that. To my way of thinking, a very regressive tax that benefits the very rich on the backs of the rest. Considering the speed at which robotics is moving, I'd question just how many even middle class people will benefit.

[Tyr-Ziu Saxnot]

Yep, it sounded to me to be a way to make a VAT tax, without calling it that. To my way of thinking, a very regressive tax that benefits the very rich on the backs of the rest. Considering the speed at which robotics is moving, I'd question just how many even middle class people will benefit.
Tax imported items, makes it easier and more promising to make such items here, that increases production here and will make us not only a bigger exporter of products but also a bigger consumer of products made here!
When that happens this economy booms.
People once knew this and understood it but after , lets ship our industries overseas clowns made billions , it kinda got lost.
And all for the cheaper made imported product coming back in! This was a very short term gain that (as it now very evident), had a very deep and long lasting negative result.
Trump is actually using a method to reverse that negative with this(although I think its not enough)...
The point is, as factories are built here the compounded effects grow and grow- the economy returns toward a boom IMHO!
No way is the nation secure with most of our heavy industry in CHINA!!
Those responsible for that sending those millions of jobs overseas did so out of greed and others did so to weaken this nation.

One glaring example-
Walmart made extra billions quarterly- but it was at high costs to us as a whole IMHO.-Tyr

[fj1200]

Yep, it sounded to me to be a way to make a VAT tax, without calling it that. To my way of thinking, a very regressive tax that benefits the very rich on the backs of the rest. Considering the speed at which robotics is moving, I'd question just how many even middle class people will benefit.

I was honestly surprised the Republicans were behind such a thing especially Paul Ryan but I think the lack of specifics from trump leads some of them to propose something. My guess is the Senate doesn't pass it even if the House does.


Tax imported items, makes it easier and more promising to make such items here, that increases production here and will make us not only a bigger exporter of products but also a bigger consumer of products made here!
When that happens this economy booms.
People once knew this and understood it but after , lets ship our industries overseas clowns made billions , it kinda got lost.
And all for the cheaper made imported product coming back in! This was a very short term gain that (as it now very evident), had a very deep and long lasting negative result.
Trump is actually using a method to reverse that negative with this(although I think its not enough)...
The point is, as factories are built here the compounded effects grow and grow- the economy returns toward a boom IMHO!
No way is the nation secure with most of our heavy industry in CHINA!!
Those responsible for that sending those millions of jobs overseas did so out of greed and others did so to weaken this nation.

One glaring example-
Walmart made extra billions quarterly- but it was at high costs to us as a whole IMHO.-Tyr

There is so much wrong in that post with 1929 as proof.