Friday, February 24, 2017

Robert Reich Argues that the Border Adjustment Tax Benefits Big Companies at the Little Guy's Expense.

He may have a point. Watch his video. Putting aside the politics (I am not really interested in white hat/black hat arguments), he rightly points out that as prices rise, the little guy get slammed. Although he doesn't make the point explicitly, that would also include small businesses affected by the law. And the benefit flows to large Fortune 500 companies, the ones who are hooting and hollering for this law.  Money, money, money - those guys will make larger and larger profits while paying little or no taxes.  Worse yet, the inflationary firestorm created by the BAT will also give those big guys a free pass to raise their prices, too.  In other words, their profits will swell in addition to the unfair tax break they'll enjoy . . . if they can successfully con us.

Don't worry - you'll still pay taxes.

This is an astounding tax inequity that Congress is creating and seems blissfully content in doing so. The opportunity to vacuum out our pockets is too great a temptation, I guess.

Watch out for Majoritarianism here.  What is good for the Big Guys is not good for everyone. Deciding to do this while ignoring the hideous impact on a segment of the population is, frankly, un-American.

It is a fallacy that the only way to achieve tax reform is via the BAT as funding mechanism. That is just an excuse, the route of least resistance for the lawmakers who don't want to perform the harder task of cutting spending.  And in any event, their real motivation in having a revenue-neutral tax plan is so they can pass the tax law via reconciliation, meaning by simple majority vote.  No need to cultivate Democratic support.  Bipartisanism is dead or a sham.  Take your pick.

Watch the video.

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