A short note on the BAT proposal was just published by K&L Gates, a Washington law firm. It is called "Waking Up from a Long Winter’s Nap … the Border Adjustment Tax is the Sleeper Issue in the House Republican Tax Reform Blueprint".
Here's a quote to ponder: "One thing seems certain — House Republicans plan to stick with the BAT. Speaker Ryan and Ways and Means Committee Chairman Brady continually reiterate their support for the BAT in the face of criticism. With estimates that the BAT could raise as much at $1.3 trillion and pay for almost one-third of tax reform — and stem the tide of businesses leaving the United States — it seems far more likely that House Republicans will tinker with it rather than abandon it altogether."
That says it all, and it's the key to understanding the BAT. They want the BAT for fundraising. It's how they plan to pay for tax cuts for everyone else, which is why they won't listen to reason and won't let go, period. The anti-inversions thing is a political smokescreen to make it look oh-so-patriotic. When the Democrats want some scratch, they reach into the pockets of the "One Percenters". The Republicans apparently prefer to throw importers under the bus. I bet there's some One Percenters in there, too. Something for everyone . . . .
The law firm has some cogent free advice for you. This is free advice worth the price, too: "Don’t be caught napping. Time is short. Work on the BAT has been underway for months, and Chairman Brady plans to have his tax reform plan ready when then-President Trump and Speaker Ryan say it’s time. You need to be ready, as well. Know whether the BAT affects you. Run the numbers to see how it affects your business. And have a plan to respond. This is a time when you may not be able to rely on your trade association, since many will have members on both sides of the issue and will not be able to take a position. How will you explain to the C Suite what you are doing to protect the interests of your company?" [Emphasis added.]
Hey, guys - WAKE UP. This is real. Take it on board. And then do something about it.
"...some say that the value of the dollar will increase as a result, reducing the effective cost of imports over the longer term. Others are more concerned about the effective short-term increase in the cost of imports."
ReplyDeleteDid they study Economics 101? The effect of a stronger dollar will likewise WEAKEN EXPORT demand, offsetting any expected gains from this crazed proposal.
From all appearances, they skipped that class.
ReplyDelete