The plan would subject importers to higher taxes than exporters or those that produce at home for domestic consumption. Based on a 20% tax, the proposal in itself would generate more than $1 trillion in tax revenue over 10 years. But the border-adjustment tax is only part of a comprehensive tax overhaul plan by House Republicans, which includes substantial cuts in individual income taxes, largely benefiting higher-income Americans. On the whole, experts say, the House tax reform would reduce federal tax revenue overall, even with the gain from the border-adjustment tax. Even as a border-adjustment tax raises the cost of imports, domestic demand for foreign goods will fall, thereby pushing up the value of the dollar.

Source: Los Angeles Times January 27, 2017 23:44 UTC