Most consumers like meaningful, well-paying jobs and lower tax rates. Those end results are typical of what our political candidates promise, but those results are not the automatic result of an election victory. They depend on implementing the right policies. In the recent election, one piece of a tax proposal for businesses was a “border adjustment tax” or BAT. Just this morning, President-elect Trump tweeted that GM will be hit with BAT taxes, unless they manufacture the Chevy Cruze in the U.S., instead of Mexico, as proposed.
The BAT proposal surfaced at the same time as a major announcement by Foxconn, Apple’s primary iPhone maker. Put together, these ideas could reinvigorate the U.S. manufacturing sector. Under a border adjustment tax, “companies would no longer be able to deduct the cost of their imported goods, and the sales of their exports would no longer be subject to U.S. tax. That means American companies could reduce the prices for products they sell abroad.” That results is much friendlier to the U.S. than adopting tariffs, which act only to increase the price of imports.
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