By: Zack Duvall
President Trump discussed what some are calling a “border adjustment tax” in an interview conducted by Reuters on Thursday.
The President, who talked about tax reform and American manufacturing throughout his campaign but had in January said the proposed law by GOP leaders at the time was “too complicated”, signaled that the new simplified 20% “adjustment tax” on all imported goods produced overseas is more what he was looking for in a tax reform bill.
“It could lead to a lot more jobs in the United States.” the President said about the proposed tax during the interview.
Companies such as Boeing, Caterpillar, and General Electric are just 3 out of 16 companies who have met with the President on the issues of tax reform and job growth in America and have written to congress urging them to support the new tax legislation.
The new proposed tax would, according to advocates for the legislation, allow U.S. exporters to generate more revenue as they would be excluded from the tax and gain market share within their industry. The ultimate goal being to drive domestic production of products higher and allow high paying manufacturing jobs to be created in country.
But opponents of the tax say that it would only result in higher costs for consumers, and potentially lead to a global trade war that would curtail American economic growth. Skeptics of this theory cite that the rising U.S. Dollar would ease the pressure on any rise in import prices. The also White House and GOP leaders rebuke the claims by opponents to the tax.
“What is going to happen is companies are going to come back here, they’re going to build their factories here, and they’re going to create a lot of jobs here.” President Trump said, pointing out the fact that companies who do so would avoid the new taxes all together.
White House Press Secretary, Sean Spicer, said during his daily press briefing that the tax “benefits our economy” and “helps American workers” and saying that it will “increase America’s manufacturing base.”
Treasury Secretary, Steven Mnuchin told CNBC that administration’s goal was to develop and have ready the specifics of the tax plan with GOP leaders and members of the House and Senate no later than August of this year.
The proposed tax would generate, based on estimates from the Treasury Department and administration, roughly $1 trillion in new revenue that White House and Congressional leaders said would be used to fund other government programs and incentives to help economic growth and re-build the job and manufacturing climate in the United States.