Policy & Legal Issues Raised by the Proposed U.S. Border Adjustable Tax

Abstract

This article considers the policy and legal issues raised by the Border Adjustable Tax (hereinafter “BAT”), part of the tax reforms proposed by the Republican Tax Reform Task Force. After explaining the BAT and the functions it is intended to serve, it examines the compatibility of the BAT with World Trade Organization (hereinafter “WTO”) obligations, concluding that it is likely to violate a number of WTO Agreements. It suggests modifications to the measure to assist with WTO compatibility while still addressing concerns about boosting United States (hereinafter “U.S.”) tax revenue.

Keywords: World Trade Organization (WTO) law, Republican Tax Reform Task Force, Border Adjustable Tax (BAT), Destination Based Cash Flow Tax (DBCFT), General Agreement on Tariffs and Trade (GATT), General Agreement on Trade in Services (GATS), Agreement on Subsidies and Countervailing Measures (SCM Agreement)