House Plan's Bad Math: Over-Estimates of Revenue from a Border Adjustment

House Plan's Bad Math: Over-Estimates of Revenue from a Border Adjustment

An analysis of revenue projections for the proposed border adjustment tax.

Article by Brad W. Setser and David Kamin

April 24, 2017 5:35 pm (EST)

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Current political and economic issues succinctly explained.

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One of the largest revenue raisers in the House Republicans’ framework for business tax reform is a “border adjustment.” However, projections of revenue from the border adjustment overstate revenue in two ways. The medium-term projections assume that there will be no or very limited avoidance of a border adjusted tax. The long-term revenue projections require an unrealistically large trade deficit. Download the full paper on the Social Science Research Network.

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Budget, Debt, and Deficits

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Trade

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