The GOP is advocating for a "Border Adjustment Tax," which is something like a complicated Value Added Tax that is meant to encourage companies to on-shore or re-shore their manufacturing, without raising prices for Americans (because the US dollar is supposed to rise by up to 25% (!) as a result), while removing the complexity that allows companies to dodge tax by finding loopholes.
But as Tyler Cowen demonstrates with a few well-chosen examples, simplicity is no guarantee of closing loopholes. Companies with lots of money -- and lots of money to lose by closing off loopholes -- will find it worth their while to trade in today's baroque schemes for a whole new set of ones, which will create "a game of tax lawyers on each side, where the better paid advocates are working for the corporations rather than Uncle Sam."
Trump is on record as opposing the tax, which he says -- correctly, it seems -- will be complicated enough for big companies to game.
Similar loophole problems arise from the elimination of interest deductibility. Let’s say my company is buying a machine from your company, and normally you would offer trade credit to ease the purchase. If the interest on that trade credit is not deductible, we would build the interest payments into the upfront price of the machine, making the expense deductible and circumventing the intent of the tax reform. Or I could seek such trade credit from you (and your bank behind the scenes), rather than taking out a traditional loan, again converting a nondeductible expense into a deductible expense.
'Border Adjustment Tax' Just Means New Loopholes
A coalition of shipping industry associations has published The Guidelines on Cyber Security Onboard Ships, laying out best practices for the giant ships that ply the seas, and revealing that these behemoths are routinely infected with worms, ransomware, and malware spread by infected USB devices.
Today in the Mojave desert, Virgin Galactic had a successful test flight that reached 50 miles above the surface of the earth, meeting the Federal Aviation administration’s definition of space. This places the company one step closer to the long-awaited goal Richard Branson promised: space tourism. SpaceShipTwo, welcome to space. — Virgin Galactic (@virgingalactic) December […]
No one has been reported harmed. No bomb reported found.
Everybody’s flown a paper airplane. But what if you could fly on a paper airplane? Until we invent shrink-ray technology, the PowerUp X FPV Video Paper Airplane Kit will have to do – but it’s as fun as that sounds and more. The original version of this creative toy added drone tech to the old, […]
Adobe’s design software catalog is essential to any graphics program, as much for their simplicity as their versatility. Anyone can be an effective graphic designer with tools like Illustrator and InDesign – and the right training in their potential. That’s where the Adobe CC A-Z Lifetime Bundle comes in. Whether you’re getting your feet wet […]
Businesses of any size continue to use PDFs despite – and perhaps because of – their stubborn resistance to simple editing. But for those who need a little flexibility on their documentation, the search is over for alternative software. PDF Expert for Mac is the catch-all solution for wrangling those PDFs, and it’s available at […]