Joint Committee on Taxation Releases Report on Destination-Based Taxes and Border Adjustment.

In anticipation of the House Ways and Means Committee hearing on the border adjustment tax included in the House Republicans’ Blueprint, the Joint Committee on Taxation has released a report on destination-based taxes and border adjustment. The report discusses the rationale behind destination-based taxes and describes various proposals for destination-based taxes leading up to the Blueprint. The report also summarizes papers on the economic theory behind border adjustment and why it is theoretically trade neutral. It notes, however, that such studies do not necessarily speak to the “isolated economic effects of the border adjustment component of the Blueprint.” Finally, the report also warns that if the US were to move to a system that exempts foreign earnings without the border adjustment component, companies may find it tax-efficient to shift income from the US to overseas by serving both foreign and U.S. markets from a foreign country.

Read the full report here.

Back to top