House Plan's Bad Math: Over-Estimates of Revenue from a Border Adjustment
18 Pages Posted: 15 Mar 2017
Date Written: March 13, 2017
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: Suggested Citation