With a vision of a border adjustment tax as the linchpin of corporate tax reform, Republicans are now finding out just how difficult it is to usher such a massive change through Congress. Even as the Republican Party controls both Congress and the White House, the survival of that border-tax vision is very much in doubt.
Many policy experts like the idea of border adjustment for its economic effects. By taxing imports but not exports, it would move the U.S. closer to taxing consumption rather than savings and investment, which in turn, would encourage economic growth.
Republican leaders in Congress such as House Speaker Paul Ryan and Rep. Kevin Brady, chairman of the House Ways and Means Committee, like it for another reason, too. Because the U.S. imports and consumes so much, it would raise $1 trillion over 10 years in revenue—enough to help lower the corporate tax rate to 20 percent from the current 35 percent.
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