Congress is considering a new "border adjustment tax" that would place a 20 percent tax on products coming into the U.S. -- a tax ultimately footed by us, the consumers. Those pushing this new tax claim it will bring jobs back to the U.S., but the evidence simply does not support this.
There's no certainty that companies operating outside of the U.S. will return with a border adjustment tax. These companies have built facilities and established infrastructure in other countries already. Before any move, they will weigh the tax against the cost of uprooting and rebuilding such infrastructure.
Even if a company relocates to the U.S., avoiding the 20 percent border adjustment tax, such a move is not cost-neutral. Production cost in the U.S. trends higher than in other countries, because of our high corporate tax rate and cost of infrastructure, along with the many industry regulations. Regardless of whether companies return or not, consumer prices on anything from automobiles to household products will increase.
Democrats and Republicans agree it is time to reform our tax code and bring jobs home. We do this by cutting bureaucratic red tape and putting more money -- not less -- in the pockets of hard-working Americans. The border adjustment tax does neither and is a step in the wrong direction.
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