We're getting closer. In a just released article in the WSJ, Treasury Secretary Steve Mnuchin says the BAT will not be part of the Trump tax plan:
"Mr. Mnuchin said at an event Wednesday morning that the administration wants permanent policy changes but temporary cuts could be considered too. 'This is going to be the biggest tax cut and the largest tax reform in the history of our country,' he said at a conference in Washington. . . . Mr. Mnuchin said the administration’s proposal won’t endorse the border adjustment feature that is central to the House GOP plan. The provision attempts to raise revenue by taxing imports, but not exports. Mr. Mnuchin said the administration wasn’t opposed to the provision in concept and that he liked aspects of it. But he said, 'We don’t think it works in its current form.'”
The WSJ goes on to comment on Speaker Paul Ryan's position:
"Mr. Ryan hasn’t backed down on the border adjustment idea, but he said Wednesday that he knows the proposal needs modifications in response to criticism from retailers and others. 'We don’t want to have severe disruptions,' Mr. Ryan said."
This is the closest to a concession that I have seen Ryan make on the BAT.
As noted in my last post, we should not assume that the BAT is dead yet. The Republicans need cash to make this plan work. Unless and until they realize that real costs must be reduced, they are likely to continue to rely on reallocation, which is the appeal of the BAT (to certain people).
An interesting notion is that a massive tax reduction is the perfect opportunity to slash entitlements. After all, if you are actually going to pay far less in taxes, a future financial need like retirement or retirement health care can be financed with those saved dollars. Why leave the money in the inefficient hands of the government? So, for instance, the government could shift the burden of current entitlements on Americans based on age and ability to pay (income). This would not have to pull the rug out from under anyone, but would sharply reduce the size of government and the size of the budget deficit. It's a way out, but would require political courage, political collective action and thoughtful design. No one need be roadkill to get this done.
In any event, the BAT is getting closer to its just demise. We fight on until it's dead and gone.
Post a Comment