As a candidate, Donald J. Trump made a broad rewrite of the tax code sound simple: Slash income tax rates for people and companies, threaten to punish American firms that seek cheaper foreign labor with a tax on the goods they import from offshore factories, and pay for it with surging economic growth.
But President Trump is finding that enacting the first overhaul of the tax code in 30 years will not happen like the raft of executive orders he signed for the television cameras during his first week in office. The contortions that his administration went through over a single part of the tax puzzle—the tax treatment of imports—demonstrated how politically fraught the issue will be, even with Republicans controlling all the levers of power in Washington.
While Trump’s views on a tax code overhaul appear to still be evolving, his economic advisers have been tripped up over the virtues of the taxation of imports and a contentious provision in the House Republican tax plan that would effectively slap a 20 percent tax on imports to generate revenue and encourage domestic production and exports.
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