by Mish

However, the Republicans cannot make up their minds on what to do. Meanwhile, with no leadership from Trump, divisions in Congress are widening.

Please consider Trump Muddies the Waters on Import Tax Plan.

Donald Trump’s refusal to take a clear position on a controversial import tax is perpetuating uncertainty over tax reform and underscoring divisions in the administration and Congress over policies rooted in economic nationalism.
In his speech to Congress on Tuesday, Mr. Trump voiced the “America first” complaint that US exports were taxed more than imports coming into the country, but he declined to say how he thought that problem should be solved.
The ambiguity did not stop both sides of the debate over the import tax — also known as a “border adjustment” in a plan devised in the House of Representatives — from spinning his remarks as a positive signal for themselves.
Kevin Brady, the Republican lawmaker in charge of the plan, said the president was “obviously on the same page” as himself. Retailers, which face potentially devastating tax bills as big importers, said Mr. Trump seemed to be hinting at the case for targeted tariffs, not a new tax.
Rohit Kumar, a former aide to Senate majority leader Mitch McConnell who is now at PwC, said: “I don’t think the vagueness or lack of specificity on border adjustment was an accident. These were well-planned, well-executed remarks. I think they did what they sought to achieve.”
Similar divisions have emerged within the Trump administration. Wilbur Ross, commerce secretary, and Peter Navarro, head of a new National Trade Council, are in favour of a border adjusted tax. Gary Cohn, head of the National Economic Council, is against it.

Mish Suggestion

An import tax is a bad idea. It will raise consumer prices and do little for exports because countries will retaliate. It’s also againt WTO rules.

I have a simple suggestion: Cut the corporate income tax rate to zero and be done with it. Instead of US corporations rushing to do business elsewhere, foreign and domestic corporations will seek out the US as a place to do business.

Mike “Mish” Shedlock

Untangling Trump’s Incompatible Goals on the US Dollar, Tariffs, China, Republican Tax Plan

Donald Trump described the dollar as “too strong” and the yuan as too low. He also went after House Speaker Paul Ryan’s tax plan as “too complicated”.

Case for Zero Corporate Taxes: Who Really Pays Them?

President Trump and Congress have their eyes on a tax overhaul now that Obamacare replacement has died.

GOP Tax Reform: How Does It Affect Me? You? Mish Alternative Proposal

People have asked me to comment on the GOP’s Unified Framework For Fixing Our Broken Tax Code. I will do so honestly. In the comments below I explain how the proposal benefits me personally, small business owners in general, and the average person.

Trump Kills TPP, Opposes “Border Adjustments”, Promises “Major Border Tax”: Trade Hardball

On January 16, president-elect Donald Trump chastised Paul Ryan for proposing “border adjustments”. Today President Trump promises a Major Border Tax and pulled the US out of TPP.

Republican Debt Ceiling Shenanigans

Now that Republicans are in control of the Executive and both Legislative houses, might it be time to address the budget deficit?

Tax Foundation Analyzes Tax Plans: 10-Year GDP (Trump +6.9%, Hillary -2.6%)

The Tax Foundation has an interesting analysis of Trump’s tax plan compared to Hillary’s.

Hypocrites All Around as Senate Republicans Reach a Budget Deal

Senators Pat Toomey (R., Pa.) and Bob Corker (R., Tenn.) reached a mutual agreement to set parameters for a tax overhaul.

Tax Cut Stimulus Mish vs. Krugman: Libertarians Dead Wrong?

Curious Mix: Mainstream media and Libertarians both believe the Trump tax cuts will stimulate the economy. It won't.

Mish’s Sure Fire Proposal to End Japanese Deflation: Negative Sales Taxes, 1% Monthly Tax

It’s rather amusing that Japan cannot destroy its currency even though it has tried, and tried and tried.