Last week, I wrote about how the centerpiece of Paul Ryan’s tax reform plan—a border-adjusted corporate tax, or BAT—appeared to be all but dead thanks to overwhelming opposition from key senators. On Wednesday during an interview on Fox Business Network, however, President Donald Trump left open the possibility that he would support the idea, and even suggested that a little creative rebranding could revive its prospects.
Unfortunately for Republicans hoping that the president might be able to play a useful role in brokering a tax reform deal, Trump’s comments demonstrated that he is either illiterate on this particular policy issue, or thinks that he’ll be able to skirt by peddling incoherent talking points that anybody with a passing familiarity with the subject will see through.
To quickly recap, the House GOP’s tax reform plan would effectively put a tariff on imports and subsidize exports. It has met furious resistance from retailers like Walmart who sell lots of goods made overseas and are afraid that the proposal would hurt their business by forcing them to pass on higher prices to their customers. Economists have suggested this wouldn’t be the case, because foreign exchange rates should theoretically adjust to cancel out the effect of the new import tax. But that promise hasn’t pacified the idea’s opponents, because what retailer would bet their business on an academic theory about currency markets?
Trump has sent…
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