Wednesday, April 19, 2017

Recent interview on corporate tax reform and border adjustment

A few weeks back I was interviewed (via email) by Yossi Krausz, the managing editor of Ami Magazine, for an article on the prospects for tax reform. They're an NYC magazine aimed mainly at the Orthodox Jewish community. It was an Ami reporter who, back in February, asked Trump the question about rising anti-Semitism around the country that drew an angry and thin-skinned response from him.

The article has now appeared, although it doesn't appear to be available online. Title: "Will Trump Pass Tax Reform? Doubts in the Wake of the Healthcare Debacle." Here are the quotes from my interview:

1) I called it unlikely that the Democrats would cooperate with the Republicans on a corporate tax reform bill: "Many Democrats want to lower the corporate rate, and they may also share Republican dislike for (universally reviled!) aspects of our current systm for taxing US multinationals' foreign source income, but I doubt that the parties will find common ground."

2) Re. the border adjustment tax: "I expect it to be dropped due to intense opposition in some circles, plus the difficulty of making it work right, which would require more expertise and time than the White House or congressional leadership is williug or able to bring to bear on it....

"Almost no one understands border adjustment. This leads to both undue support and undue opposition; for example, people who like tariffs may support it although it's trade-neutral over the long run, people who hate value-added taxes may support it even though it's basically a VAT plus a couple of extra features, and companies that think it will hurt them may be wrong about the economics (although we don't know this for sure)."

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