Congress Should Leave the Border Adjustment Tax Behind
By Adam Michel, Policy Analyst at The Heritage Foundation
BAT, RIP? That’s what some people are claiming. And with good reason.
The border adjustment tax (BAT), a controversial proposal to remake the corporate income tax, has divided prominent economists, tax experts, and industry groups. It’s time to move past the border tax distraction to focus on getting tax reform across the finish line.
The House GOP Blueprint is a good foundation for updating the tax code. Without the BAT, the plan lowers the corporate tax rate and allows full expensing. Following the lead of most other Western countries, the U.S. should move towards a simpler territorial tax system that only taxes profits earned here in the U.S. A true territorial system paired with other reforms, rather than the quasi-territorial border adjustment, would make U.S. businesses more competitive abroad and deliver much needed economic growth through new investment and jobs.
*Originally published in The Hill. Continue reading here.
Further reading: Time to Move Past the Proposed Border Adjustment Tax