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A border adjusted tax on enterprises?

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I'm Supposn

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A border adjusted tax on enterprises?

Regarding house speaker Paul Ryan, Kevin Brady, the housechairman of the ways and means committee Kevin Brady, and other house Republicans considering transformation of our federal corporate income taxes to be destination based cash flow tax, (aka border adjusted tax):

It’s being considered that reduction of enterprises taxesshall disallow overseas expenditures, including the costs of imported products to enable reductions of their enterprise’s taxable incomes.
Additionally, theyintend to disallow reductions of those bases’ taxable incomes due to interest paid to entities both within and beyond USA borders?
I don’t understand how they intend to monitor and enforce such tax policy and thus I question the feasibility of this proposed taxing concept.

I’m among the proponents forUSA unilaterally adopting the trade policy described within Wikipedia’s “ImportCertificates” article.It would almost or entirely eliminate USA’s chronic annual trade deficits of our globally traded goods.It’s not applicable to the values of scarce or precious minerals integral to the goods or to intangible products.
[I acknowledge the difficulty of objectively assessing the commercial values of even tangible products when they are at USA entry or exit ports.This difficulty is Import Certificate’s greatest fault.

I too agree government’s discretionary powers should be limited to a feasible possible extent; [althoughit would be civil service statisticians and economists that would establish and annually update guide lines for assessing the values of goods, it’s still under the legislature and administrative, (and thus political) oversight].

For these reasons, IF DBCFT is feasible, it certainly should be fully considered.

Similarly, to the concept of Import Certificates, the Republicans claim this proposal’s unilateral, would greatly eliminate our price disadvantage to imported goods within USA's domestic markets, promote our exports and reduce our chronic annual trade deficits.

Unlike Import Certificates,it’s applicable to goods and service products and government does not determine or confirm their commercial values for tax purposes.

I just don’t understand how it would work; its explainers are less explicit and more confusing.

Respectfully, Supposn
 
Excerpted from:
https://taxfoundation.org/house-gop-s-destination-based-cash-flow-tax-explained/

The GOP’s plan would alter the corporate income tax in five major ways:
1. The tax rate would be lowered to 20 percent.
2. Businesses would no longer need to depreciate capital investments. Instead, they will be able to fully write off, or expense them, in the year in which they purchased them.
3. Businesses would no longer need to pay tax to the IRS on profits they earn overseas.
4. Businesses would no longer be able to deduct interest as a business expense.
5. The corporate tax would be “border adjusted.”

These changes turn the tax into what is called a “destination based cash flow tax.”
/////////////////////////////////////////////////////////////////////////////////////////////

Our current corporate tax policy of treating all enterprises’ interest paid as an ordinary reduction of their taxable incomes always made sense to me.
The proposal for transforming our taxing system on individual and enterprises net incomes to be “destination based cash flow taxes”, (DBCFT) would no longer enable reducing taxable income by the expenditures of interest paid.

This has significant consequences upon industries such as railroads or public utility corporations that are price regulated and highly sensitive to their debt service costs. This change will significantly increase the costs of enterprises that borrow and consequentially increase their products prices; I don’t think the policy’s inflationary but it will discourage new enterprises from being launched and hinder their survival in their early years; established enterprises with cash on hand will be at advantage. these consequences are economically net detrimental.

[I’ve always been opposed to our policy of paying corporate dividends from post-tax rather than pre-tax dollars and then granting EXTREMELY favorable tax rates to individuals’ dividend incomes. I suspect discouraging the payment of dividends has encouraged USA corporations to expand into other unrelated industries that make little financial sense; the establishment of corporate empires have been more driven by our tax laws rather than due to logical business determinations.]
I believe this policy modification of paying interest from post taxed revenue will consequentially be additional, (if not of greater) detriment to our economy.

It seems to be that DBCFT is drafted to eliminate all tax deductions for all payments to parties beyond our national borders. (I don’t know if this is feasible).
It’s problematic to question mutually agreeing parties as to aggregate amounts of interest and any or all other than interest payment amounts of wealth being transferred between them internationally.

Respectfully, Supposn
 
I'm Supposn said:
Excerpted from:
https://taxfoundation.org/house-gop-s-destination-based-cash-flow-tax-explained/

The GOP’s plan would alter the corporate income tax in five major ways:
1. The tax rate would be lowered to 20 percent.
2. Businesses would no longer need to depreciate capital investments. Instead, they will be able to fully write off, or expense them, in the year in which they purchased them.
3. Businesses would no longer need to pay tax to the IRS on profits they earn overseas.
4. Businesses would no longer be able to deduct interest as a business expense.
5. The corporate tax would be “border adjusted.”

These changes turn the tax into what is called a “destination based cash flow tax.”
/////////////////////////////////////////////////////////////////////////////////////////////

Our current corporate tax policy of treating all enterprises’ interest paid as an ordinary reduction of their taxable incomes always made sense to me.
The proposal for transforming our taxing system on individual and enterprises net incomes to be “destination based cash flow taxes”, (DBCFT) would no longer enable reducing taxable income by the expenditures of interest paid.

This has significant consequences upon industries such as railroads or public utility corporations that are price regulated and highly sensitive to their debt service costs. This change will significantly increase the costs of enterprises that borrow and consequentially increase their products prices; I don’t think the policy’s inflationary but it will discourage new enterprises from being launched and hinder their survival in their early years; established enterprises with cash on hand will be at advantage. these consequences are economically net detrimental.

[I’ve always been opposed to our policy of paying corporate dividends from post-tax rather than pre-tax dollars and then granting EXTREMELY favorable tax rates to individuals’ dividend incomes. I suspect discouraging the payment of dividends has encouraged USA corporations to expand into other unrelated industries that make little financial sense; the establishment of corporate empires have been more driven by our tax laws rather than due to logical business determinations.]
I believe this policy modification of paying interest from post taxed revenue will consequentially be additional, (if not of greater) detriment to our economy.

It seems to be that DBCFT is drafted to eliminate all tax deductions for all payments to parties beyond our national borders. (I don’t know if this is feasible).
It’s problematic to question mutually agreeing parties as to aggregate amounts of interest and any or all other than interest payment amounts of wealth being transferred between them internationally.

Respectfully, Supposn
Click to expand...

the objective is always to eliminate govt interference in business so business can concentrate on business,i.e, providing us the best jobs and products and standard of living possible. Thus the business tax should be eliminated. This is also sensible since it is passed on to consumers anyway.We have the tax only to pander to the pure ignorance of liberals.
 
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