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House Plan's Bad Math: Over-Estimates of Revenue from a Border Adjustment

18 Pages Posted: 15 Mar 2017  

David Kamin

New York University School of Law

Brad Setser

Council on Foreign Relations

Date Written: March 13, 2017

Abstract

One of the largest revenue raisers in the House Republicans’ framework for business tax reform is a “border adjustment.” However, projections of revenue from the border adjustment overstate revenue in two ways. The medium-term projections assume that there will be no or very limited avoidance of a border adjusted tax. The long-term revenue projections require an unrealistically large trade deficit.

Keywords: Destination-based cash flow tax, border adjustment, border-adjusted tax

JEL Classification: E62, H25

Suggested Citation

Kamin, David and Setser, Brad, House Plan's Bad Math: Over-Estimates of Revenue from a Border Adjustment (March 13, 2017). Tax Notes, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2932400

David Kamin (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

Brad Setser

Council on Foreign Relations ( email )

The Harold Pratt House
58 East 68th Street
New York, NY 10021
United States
212-434-9471 (Phone)

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